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CONSUMERS' COOPERATION 



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THE MACMILLAN COMPANY 

IWW YORK • BOSTON • CHICAGO • DALLAS 
ATLANTA • SAN FRANCISCO 

MACMILLAN & CO., Limited 

LONDON • BOMBAY • CALCUTTA 
MELBOURNE 

THZ MACMILLAN CO. OF CANADA, Ltd. 

TORONTO 



CONSUMERS' 
COOPERATION 



BY 

ALBERT SONNICHSEN 



JI3etD gotb 
THE MACMILLAN COMPANY 

1919 

All rights reserved 



HI13Z7/ 



COPTEIGHT, 1919 

By the MACMILLAN COMPANY 



Set up and electrotyped. Published, September, 1919 



i^uy -6 1919 



©CI.A536455 



FOREWORD 

Until the war, no speaker on Consumers' Cooperation 
could escape a question as pertinent as it was monoto- 
nous: " Why has success been so brilliant and con- 
tinuous in England and other European countries while 
results are so meager in the United States?" For 
the first time this form of Cooperation has become a 
serious working class interest. Extensively and in- 
tensively it is on a scale which makes possible if not 
an answer, at least a more confident prophecy that we 
are to take our place in this world attempt to make 
" democratizing industry " something more than a 
phrase. 

I am far from giving it as a primary or even a sec- 
ondary reason why cooperation so long halted in this 
country, but it has been sorely hampered by muddling 
together economic activities which have very little in 
common. A state of mind in which Profit-sharing, 
Labor Copartnership, Citrous Fruit Companies, Co- 
operative Creameries and the like, are identical with 
Consumers' Cooperation, is one in which progress is 
embarrassed. 

No one will read Mr. Sonnichsen's admirable study 
without gratitude that once for all he has cleaned up 
his subject. No American writer has done this with 
so much lucidity and finality. This is the distinction, 
as it is the excellence of the book. There is up-to-date 
information, with cheering accounts of the extraordi- 
nary growth, almost boom, of the movement. The 



VI FOREWORD 

volume would be well worth having for this alone. 
Its analysis and logical approach, hov/ever, are what 
students and those struggling with cooperative enter- 
prises will find most illuminating. It is, moreover, on 
the side of its severe consistencies that it may be found 
open to criticism. Only as in England, where " pro- 
duction " has been brought definitely into the service 
of the store; only where goods are made not for profit 
but for consumers' use, have economic interests been 
in any real sense harmonized. Those who believe that 
Consumers' Cooperation is to conquer the world's in- 
dustry find in that mastery the solution of conflicting 
business interests. Those of us who hold that private 
profit and interest on loans are still utilities and are to 
remain so for any calculable future will still think of 
Consumers' Cooperation as only a partner in making 
and distributing wealth. However powerful the part- 
ner becomes he will be beset by business interests which 
conflict as do those of borrower and lender — buyer 
and seller. To those of this opinion Mr. Sonnichsen's 
book is all the more welcome. 

As a matter of fact, we are to struggle on in a most 
illogical and tangled world. Farmers' Elevators, Co- 
operative marketing and cheese factories are to remain. 
They are very awkward from Mr. Sonnichsen's point 
of view, but we must tolerate them as a part of the 
total Cooperative Movement. We have to do this in 
the teeth of inconsistencies as we do with other prob- 
lems in practical life. 

Economic organization and even economic theory 
which bring the interest of producer, necessary mid- 
dlemen and consumers into final harmony are at a far 
and safe distance. Meantime the author has done 
something better than the impossible. More than any 
book since that of Beatrice Potter (Mrs. Sidney 



FOREWORD VU 



Webb) — which Schmoller called " road breaking " 
— ■ Mr. Sonnichsen has lifted Consumers' Cooperation 
into its ov/n clear light. This will win him the praise 
he deserves. 

John Graham Brooks. 



INTRODUCTORY REMARKS 

It has only been within the past six or eight months 
that we Americans have begun taking stock of the eco- 
nomic results of the war. In Europe the peoples of 
the belligerent countries began contemplating costs 
after the first year or two of fighting, one by one, in 
the order in which they were later vanquished. Now 
we are all estimating costs — and find them appal- 
ling. 

Among all the peoples involved in the war, directly 
or indirectly, there has developed a realization that 
the present industrial system is inadequate in repair- 
ing such damage as the war has caused. Never before 
have people felt so strongly that social need, rather 
than personal profit, should be the stimulus behind 
production. In proportion to the degree to which 
it has been stricken each nation has turned to more 
or less radical remedies, rangfing: from extreme Com- 
munism to government regulation. Russia and Hun- 
gary, in black despair, have resorted to what we call 
Bolshevism, not because the average Russian or Mag- 
yar has suddenly become imbued with an enthusiasm 
for social equity, but because collectivism seems to him 
to promise the quickest relief from his present eco- 
nomic misery. Even in England and this country 
the people have resorted to mildly Socialistic measures 
for relief; government control. Everywhere there 
has been the same realization of the inability of private 
industry to meet the needs of a critical situation. 

When so conservative an institution as the Catholic 
Church in America officially recommends, however 



X INTRODUCTORY REMARKS 

vaguely, the democratic partnership of Labor in the 
industries of the country, it may safely be taken for 
granted that this loss of faith in private industry is 
fundamental; that, as Lloyd George once remarked 
during the war, things will never again be the same 
as they were before the war. Economic pressure is 
no less now than it was during the struggle. Without 
discussing the injustice, or justice, of it. people are 
going to become more and more discontented as they 
continue paying back the money which was advanced 
by the prosperous classes to meet the immediate ex- 
penses of the war, more often as a good investment 
than as an act of patriotic sacrifice. 

In every country there is now an overhanging fear 
of Bolshevism, visible in the frantic endeavor to sup- 
press '' propaganda." This is in itself nothing more 
than an admission on the part of the prosperous classes 
that the masses are, and have reason to be, discon- 
tented with conditions as they are, for no amount of 
argument can make suicide seem alluring to a con- 
tented man. 

The masses are discontented. They are groping 
around for remedies. In proportion to the economic 
pressure which weighs them down they will act ju- 
diciously and carefully, or impulsively and quickly. 
In the latter case we shall have Bolshevism. \Ye shall 
have evolution, or revolution. There will be no stand- 
ing still; even the masses of China have begun to move 
ahead. 

Still another element besides economic pressure will 
influence the people in their choice between the two 
methods, and that is education, knowledge, To the 
ignorant mind the simpler method makes first appeal, 
and a blind upsetting of things that are is the essence 
of simplicity. The man who knows, from the expe- 



INTRODUCTORY REMARKS XI 

rience of history, that every political revolution brings 
its own reaction ; that permanent social changes for the 
better have invariably come about through evolution- 
ary growth, will resort to violent revolution only under 
great pressure — or if the processes of evolution are 
arbitrarily checked by those in power. Let this man 
freely study the theories which the Bolshevist has to 
offer him. Let him compare them with the theories 
of the other propagandas which have as their object 
a radical change in the present social system. Then 
let him make a further comparison between the ab- 
stract theories and the practical results of concrete 
efforts in the same direction. Provided that present 
misery does not blind his judgment, this man will not 
decide in favor of overnight adventures. It is far 
more likely that he will put his shoulder to the wheel 
and push hopefully ahead, realizing perhaps that the 
ideal will not be attainable within his own lifetime, or 
ever, in all likelihood, but that over and over again he 
will meet on his way such minor triumphs as will not 
only afford him the desired relief in a generous meas- 
ure, but will send the realization of legitimate conquest 
glowing through his being. 

It is as such an alternative that Consumers' Coop- 
eration presents itself. And let me here emphasize 
this point: that Cooperation is an alternative to rev- 
olutionary and political Socialism, not an antidote, or 
a compromise. For in its ultimate aims it is quite as 
revolutionary as Bolshevism, and much more so than 
the programs of the political Socialist parties. Even 
so conservative an exponent of its purposes as the late 
Earl Grey, formerly Governor-General of Canada, de- 
clared that ''it is in our power, if we are only suffi- 
ciently in earnest, to secure the triumphant realization 
of a future international, cooperative commonwealth 



XU INTRODUCTORY REMARKS 

which we beheve will one day be coequal and coex- 
tensive with the whole civilized world." Lenin him- 
self has uttered nothing more radical than that. 

It is in method that Cooperation is opposed to 
Bolshevism, nor is it improbable that many a sincere 
Bolshevist chooses violent or political revolution as a 
means to his end only because he can conceive of no 
other. The Cooperator, however, is opposed to such 
measures, not because they are morally wrong, for if 
there is an end which justifies war, there may also be 
an ideal which justifies revolution, but because he be- 
lieves that they are economically wrong; that they 
cannot achieve the end they seek. 

The masses are groping around in the darkness 
for remedies, a remedy. They have definitely turned 
their backs on the old order. Wholly, or in part, it is 
doomed; only the most ignorant and stupid reaction- 
ary can deny that. It is in the interest of all alike that 
they choose wisely. 

It is with the firm conviction that the people will 
choose wisely that the Cooperator presents his plan 
for a regenerated world. 

Though Cooperation is older than all the Socialist 
programs, it has only been within the past few years 
that it has become conscious of its own social signifi- 
cance, of its revolutionary tendency. Being a move- 
ment of spontaneous growth, it has had few exponents 
of its philosophy. In a certain sense it has no phi- 
losophy. It has steadfastly ignored all theories pro- 
pounded for it and has continued on its way, bound 
by economic laws which may be defined only by deduc- 
tion. Until recently its practical experience was too 
limited for this purpose. For this reason, too, writers 
on the subject have invariably confused its boundaries 
and extended them into other fields of joint action, 



INTRODUCTORY REMARKS Xlll 

associating the movement with enterprises thoroughly 
out of sympathy with it. 

During the past few years, but especially during the 
war, Consumers' Cooperation has been sharply defin- 
ing itself, and now it leaves no room in which to doubt 
its methods and ultimate purposes. From what it has 
already achieved materially we are able to deduce a 
theory of industrial reorganization complete within 
itself, slow and peaceful in its processes of forma- 
tion, but definite in the end to be attained. 

Nor should this subject be of merely abstract in- 
terest to us Americans, for already the Cooperative 
Movement has firmly established itself, not only in the 
United States, but throughout the two American conti- 
nents. It is here, not only as a theory, but as an es- 
tablished fact, well emerged from the experimental 
stage of its development. 

The present work makes no pretensions to being a 
complete history of the International Cooperative 
Movement. It does, however, outline broadly the sig- 
nificant events in the early development and recent 
growth of the movement, hitherto dispersed through- 
out a multitude of reports, pamphlets, year books, offi- 
cial organs, consular and government reports and 
numerous books devoted to other irrelevant matter. 
Some books there are, indeed, treating the subject 
from its modern point of view, notably Mrs. Sidney 
Webb's '* The Cooperative Movement in Great Brit- 
ain," and Percy Redfern's " History of the C. W. S. 
(Cooperative Wholesale Society),"^ but these two 

^ Two recent books, " Cooperation, the Hope of the Con- 
sumer," by Emerson P. Harris, and " Cooperation and the 
Future of Industry," by Leonard S. Wolf, are important contri- 
butions to the literature on Consumers' Cooperation, the first 
on account of its practical suggestions, the second because of 
its breadth of vision, 



XIV INTRODUCTORY REMARKS 

writers cover only a limited field. They do not pre- 
sent an account of the most remarkable achievement 
of Consumers' Cooperation; the part it has played 
in the war and the promise it gives of being perhaps 
the most important factor in reconstruction. 



Contents 

PAGE 

Foreword v 

Introductory Remarks . . ix 

CHAPTER I 

Searching for Remedies 3 

The boundaries of Consumers' Cooperation. Steam- 
driven machinery brings about a new system of in- 
dustry. The evil conditions brought about by the new 
system. Many remedies advocated. Robert Owen 
leads the search for a solution. His schemes, and why 
they failed. 

CHAPTER n 

The First Sproutings 11 

The working classes grope for remedies. They or- 
ganize the first consumers' societies. The cooperative 
store in Fenwick, Scotland. The flour milling society 
of Hull. Dr. William King, the first prophet of the 
modern Cooperative Movement. His appeal to the 
working classes. He emphasizes the importance of or- 
ganizing as consumers. His philosophy outlined. 

CHAPTER HI 

The Twenty-eight Weavers of Rochdale . . 22 

Chartism, the repeal of the corn laws — the period 
of nineteenth century Bolshevism. The masses again 
consider evolutionary methods. The weavers of Roch- 
dale raise the banner of the modern Cooperative 
Movement. The plan which made Rochdale famous. 
Dr. King's idealism made practicable. 

CHAPTER IV 

Federation 28 

The rapid growth of the consumers* cooperative 
store movement. The leaders discuss federation. The 

XV 



XVI CONTENTS 

PAGE 

fight against adverse legislation, and its success. The 
English Cooperative Wholesale Society is established. 
The obstacles confronting its early development. The 
British Cooperative Union, the educational federation 
of the British societies. 

CHAPTER V 

Cooperative Production 40 

The necessity of obtaining control of a cooperative 
source of production. The Christian Socialists, and 
the plan they advocated. The Self-governing work- 
shop. The English Wholesale Society embarks on 
manufacturing on its own account. The bitter strug- 
gle between the advocates of the two systems. The 
Christian Socialists appeal to the yearly cooperative 
congresses. The Wholesale Bank gives financial as- 
sistance to the self-governing workshop societies and 
is thereby brought to the verge of bankruptcy. 

CHAPTER VI 

Cooperation Spreads Abroad 55 

The United States one of the first countries to imi- 
tate the example of the British Cooperators. The 
early societies in Switzerland — France — Denmark. 
Germany is hampered by the middle class preachings 
of Schulze-Delitzsch. The split in the German move- 
ment. Growth in Italy. Early societies in Russia. 
Organization of the wholesale societies. 

CHAPTER VII 

Tpie International 63 

The community of economic interests of all nations, 
E. de Boyve, a French Cooperator, proposes an inter- 
national federation. The British accept the idea. The 
Christian Socialists block the proposal to further their 
own theories. Attempt to organize an international 
organization independent of the British cooperative 
societies. Its conservative character. The British 
Cooperative Union's support is finally solicited. The 
first international congress, held in London, in 1895. 
The fight between the partisans of profit sharing and 
true Cooperation. Muddle headed reformers. 



CONTENTS XVll 

CHAPTER VIII PAGE 

Evolution of the International Cooperative 

Alliance 74 

The International straightens its crooked back. The 
Socialists change their attitude in favor of Coopera- 
tion. The consumers' theory of cooperative produc- 
tion is justified. The International Congress at Buda 
Pesth ; its revolutionary declaration. The middle- 
class societies withdraw. Socialists attempt to capture 
the congress held at Cremona, in 1907. Aims of Co- 
operation, as voiced by Luigi Luzzatti, Italian states- 
man, and Earl Grey. 

CHAPTER IX 

Growth 85 

The need of specially trained men for cooperative 
industry. The Scottish Wholesale Society initiates a 
big productive enterprise. Its factories at Shieldhall. 
The English Wholesale fights the private transporta- 
tion lines. It takes up flour milling. Breaking the 
soap trust. The bitter fight between the Scottish 
wholesale and the Scottish traders. Swedish whole- 
sale smashes the sugar and margarin trusts. The 
Swiss Wholesale buys out the Swiss meat trust. The 
English Wholesale begins agricultural production. 
Cooperative production by local societies. The United 
Cooperative Baking Society of Glasgow. Cooperative 
housing. Status of the Movement in 1914. 

CHAPTER X 

The " Maisons du Peuple " of Belgium . . . 107 
Early failure of Belgian Cooperation. Eduarde An- 
seele's proposal to the weavers' union of Ghent. The 
Vooruit baking society. Surplus savings devoted to 
social benefits. The fight with the Catholic Church. 
The Belgian pleasure palaces. The Vooruit captures 
the Royal Clubhouse of Ghent. The cooperative pe- 
destrian clubs. Interchange of children between Flem- 
ish and Walloon Cooperators. The Maison du Peuple 
of Brussels saves a quarrymen's strike. Belgian move- 
ment handicapped by alliance to Socialist party and 
lack of cooperative production. 



XVlll CONTENTS 

CHAPTER XI PAGE 

Cooperation During the War 121 

Cooperators fear the war. The food panic in Great 
Britain, and how the cooperative societies stabilized the 
situation. The rush on the cooperative stores. New 
members excluded. Tremendous growth in trade and 
membership at the end of the year. Abnormal de- 
velopment in other belligerent countries. German sol- 
diers refuse to shell French cooperative store build- 
ings. Growth of the Cooperative Movement during 
the whole war period. German Cooperators denounce 
the war. Development in the neutral countries. The 
Cooperative boom in Russia. The Russian Cooper- 
ators and the Bolsheviki. 

CHAPTER XH 

Cooperation in the United States .... 145 

Early societies in New England. The First move- 
ment ends with the Civil War. Materialistic spirit of 
the Granger movement. The Sovereigns of Industry 
■and their temporary success. The Knights of Labor. 
The revival in California. The movement in the 
Northwest. The East Side Jews of New York spread 
the idea. What came of their efforts. The Coopera- 
tive League of America. The stores in southern Il- 
linois. The Tri-State Cooperative Society of Penn- 
sylvania. The Seattle cooperative society buys out the 
municipal market. The cooperative bakery which pro- 
tested against the Government's high prices. The ci- 
garmakers' cooperatives of Tampa, Fla., fight the 
wholesalers. American Federation of Labor indorses 
Cooperation. 

PART II 

COOPERATION AS A FACTOR IN THE 
SOCIAL REVOLUTION 

CHAPTER I 

Limiting the Field to Revolutionary Coopera- 
tion 171 

Confusion between Consumers' Cooperation and 
other forms of joint effort. Fundamental difference 



CONTENTS XIX 

PAGE 
between Consumers' Cooperation and agricultural sell- 
ing societies. The Jatter ptirely capitalistic. Bitter 
struggle between the two forms of cooperative organi- 
zation in Switzerland. How the consumers* societies 
propose to conduct agricultural production. The anti- 
social character of the Schulze-Delitzsch credit un- 
ions. Workingmen's credit unions. 

CHAPTER II 

Cooperation and Socialism 185 

Cooperation and Socialist both demand industry for 
use instead of for private profit. Cooperation against 
state ownership. It does not recognize the " class 
struggle." Diversity of interests between capitalist 
groups. Social character of Consumers' Cooperation. 
Free will the basis. Cooperation in politics. But it is 
essentially an economic movement. Why Cooperation 
will probably never become universal. Room for per- 
sonal initiative and invention. The psychological dif- 
ferences between Cooperation and Socialism. Coop- 
eration is Anarchism rationalized. 

CHAPTER HI 

Cooperation and Labor 205 

Affinity between ideals of the early Christian So- 
cialists and modern Syndicalism. Labor under Coop- 
eration. The natural sympathy of Cooperative organ- 
izations for Labor movements. English Wholesale 
sends shiploads of provisions to the Dublin strikers. 
Even Lenin recognizes Cooperation as a labor move- 
ment. A definition of a workingman. How Coopera- 
tion transforms the middle classes into workers. 
Workers and consumers identical. Syndicalism and 
Cooperation contrasted. Labor should be subservient 
to society as a whole. Consumption the basis of all 
industry. 



PART I 
AN HISTORICAL OUTLINE 



CONSUMERS' COOPERATION 

CHAPTER I 

SEARCHING FOR REMEDIES 

In tracing cooperation back to its origin there is dan- 
ger of considering the word in its dictionary sense, 
which would send us groping about in the gloom pre- 
ceding the dawn of history, when savages first began 
to organize raids on their neighbors. Broadly, co- 
operation means any kind of joint effort, for good or 
bad. The kind of cooperation we are considering 
does not even include every kind of good joint action. 
The movement is, in fact, unfortunate in its name in 
that it fails to limit it, or define it. One has only to 
run through the card index of any large library to see 
what a multitude of varying forms of human enterprise 
the name covers. 

The specific kind of cooperation here considered has 
most commonly been called " distributive cooperation," 
but this gives a wholly erroneous impression, for it is 
production which has given it its significance. Also, 
it has been called the " store movement," for the reason 
that it had its origin in the cooperative-store societies. 
More recently the name '' Consumers' Cooperation " 
has been applied, and this does give a fairly correct 
impression, distinguishing it from those other forms 
of joint effort with which it has generally been lumped 

3 



4 CONSUMERS COOPERATION 

and with which, in methods, principles, and aims, it 
has nothing in common. 

The conditions which gave birth to the Consumers' 
Cooperative ^lovement arose from the invention of 
steam-driven machinery. It was nursed in the same 
cradle with political Socialism and Trade-Unionism. 
Indeed, one man, Robert Owen, is credited with being 
the father of all three. The same cause, or causes, 
undoubtedly did create the three and the same condi- 
tions continued to develop them. For a while, in fact, 
all three forms of effort were included under the same 
name : Cooperation. Eventually Trade-Unionism and 
political Socialism acquired more definite forms of 
their own and were named accordingly. Cooperation, 
being the slowest to develop, retained the old con- 
fusing title. To-day, however, Cooperation stands 
forth very distinct from the other two movements. 
At first glance it may seem very closely allied with 
Socialism, but the two movements are widely different 
in their methods and, in so far as Socialism may mean 
state ownership, in their fundamental principles. 

We need not go very deeply into the revolutionary 
changes wrought by the introduction of steam-driven 
machinery. There are sociologists who still look back 
rather regretfully to the preceding period of handi- 
crafts industry, when every worker owned his own 
tools, when all things were handmade, and most men 
were, or eventually became, their own masters. 

Then came the machines, one after another, in rapid 
succession. Beginning with weaving, they invaded 
one trade after another. The hand tools were 
scrapped and their owners were set to work feeding 
the raw material to the machines in big factory build- 
ings. By far the most important machine that pres- 
ently made its appearance was one which apparently 



SEARCHING FOR REMEDIES 5 

produced nothing: the railway locomotive. By af- 
fording cheap transportation it opened up to each 
factory the whole world as a market, and gradually 
it enabled factory owners to concentrate production. 

It would seem that the invention of machines which 
could perform the labor of men, which could increase 
the production of wealth many times over, must result 
in a great benefit to society as a whole. But that was 
by no means the immediate result. 

The cost of production of all those commodities in 
whose manufacture machinery could be employed was 
indeed cheapened. Cotton, which had been more ex- 
pensive than wool, now became so cheap that it no 
longer paid the housewife to spin and weave at home 
and the picturesque spinning wheel was relegated to 
the attic. Household furniture was no longer hand- 
made, because steam saws could cut the timber and 
factory organization could nail it together at much 
less cost. And all the products of foreign countries, 
distributed all over the country by cheap railroad trans- 
portation, could now be had at continually decreasing 
prices. 

But these advantages were more than offset by the 
fact that the machine which could do the work of ten 
men retained only one as its attendant, then threw the 
other nine out of employment. These nine could not 
continue with their hand tools because they could not 
sell their handmade products so cheaply as the ma- 
chines could produce them, and still earn enough to 
Hve. Finally, it was discovered that a woman or a 
child could attend the machine as well as a man, and so 
the tenth man was also thrown out of employment. 
To save the family from starvation, his wife or one of 
his children took his place, more usually his child. 
And so began the evil of child labor. 



6 consumers' cooperation 

The great saving in economy which the machines 
effected was reaped entirely by a Hmited class, by the 
men who owned them. These waxed rich and power- 
ful and developed into the modern capitalists. The 
workers were left with nothing but their obsolete 
hand tools. 

Thus, within the space of a comparatively brief pe- 
riod, in the early part of last century, a very critical 
situation was precipitated in England and Scotland, 
where the machines had been invented. Thousands 
and thousands of workers were finding themselves 
without employment, their numbers being increased 
by each new machine, and thousands of women and 
small children were compelled to enter the factories to 
save their menfolk and themselves from complete 
starvation. Skilled adults were not wanted, but cheap 
child labor was so much in demand that the orphan 
asylums, even the insane asylums, were being emptied. 

Even the upper classes grew disturbed over the situ- 
ation, some from a genuine sympathy for suffering 
humanity, others through fear of a popular revolution, 
as had occurred just previously in France. Then ap- 
peared the social philosophers, the scholars, who began 
studying causes and effects, that they might propound 
remedies for the internal convulsions threatening the 
nation. One of the most popular of these, among the 
machine owners, at least, was a clergyman by the name 
of Alalthus. Seeing so many unemployed, he drew the 
conclusion that there were too many people, so he ad- 
vised the working classes to breed fewer children. 
Eventually the machine owners discovered that the 
working people were also consumers, and then Malthus 
lost his vogue. 

The workers themselves, being more directly con- 
cerned, placed the blame nearer to the true source of 



SEARCHING FOR REMEDIES 7 

the trouble. Instinctively they felt that the machines 
were somehow the cause of their deepening miseries 
and blindly they attacked them. All over the country 
mobs rioted, and sometimes they even succeeded in 
burning factories, destroying machines, and assaulting 
their owners. All over, among the working people, 
rose a cry for the destruction of the machines and a 
return to the good old days of hand industry, when 
all had at least an assurance of daily bread. 

The rioting and violence being futile, the workers 
organized secret societies, whose purpose was to limit 
the machines. The machine owners, who were now 
becoming politically predominant, responded by hav- 
ing the anti-combination laws passed by Parliament, 
which forbade the workers to organize. Thus began 
the Trade-Union Movement and the eternal struggle 
between Capital and Labor. 

Out of all this mad muddle rose a few clear minds, 
a few men who, by intuition rather than by reason, 
grasped at fundamental causes. One of the foremost 
of these was Robert Owen. 

Child labor especially roused his deepest indigna- 
tion and he raised his voice in violent protest. And, 
curiously enough, he was himself a machine owner, 
one of the fortunate ones who had secured ownership. 
Thus he had come into very close contact with the 
situation and knew it at firsthand. 

" Robert Owen," says an old edition of " Chambers' 
Encyclopedia," *' was a man whose life will go down 
to posterity as one long absurdity." These words 
represent, not the opinion of posterity, but the opinion 
with which the upper classes of his own times regarded 
Owen. At first they laughingly listened to him and 
humored the schemes which he proposed as remedies. 
He was very intimate with the lords and ladies of that 



8 consumers' cooperation 

time ; probably no single man was personally acquainted 
with so many people in high places as he. The Queen's 
father, the Duke of Kent, was so intimate with him 
that he often borrowed money from him, which the 
Queen scrupulously repaid after her father's death. 
Probably this may account for the very friendly atti- 
tude which the royal family ever afterward maintained 
toward anything that went under the name of Cooper- 
ation. 

But in later years Robert Owen fell from the grace 
of the great majority of people in high places, and 
from being an '' absurd " person he became the incar- 
nation of evil, and his disciples were sent to prison and 
otherwise persecuted. 

Owen was part owner and manager of the New 
Lanark Twist Company, in New Lanark, on the Clyde, 
in Scotland. On taking over the management of this 
manufacturing enterprise, in 1800, he found five hun- 
dred children employed there, chiefly recruited from 
the workhouses and orphan asylums of Edinburgh, 
ranging from six to eight years of age, their working 
hours being from six in the morning till seven at night. 
The adults, mostly women, worked under even harder 
conditions. 

Owen at once raised wages, reduced the hours of 
labor, and created an establishment not unlike the 
Ford automobile factories of our day. For the little 
children he established schools in which corporeal pun- 
ishment, even harsh words, were forbidden, and games, 
singing, and dancing were considered more important 
than book lessons. He was, at any rate, the father 
of public education and, to no small degree, he antici- 
pated Dr. Montessori. 

Gradually Owen began to evolve schemes for the 
amelioration of the working people on a much more 



SEARCHING FOR REMEDIES 9 

extensive scale. One of the first of his bigger ideas 
was the formation of communistic colonies, where the 
colonists should own the land and work the machin- 
ery of production in common. The first experiment 
of this kind under his patronage was undertaken in this 
country, in New Harmony, Indiana, in 1825. It failed 
eventually ; such enterprises seem to succeed only when 
the colonists are united by a common religious fa- 
naticism. But isolation did not seem to be a necessary 
condition in Owen's mind, for a similar communistic 
colony was founded later near London. Fourier, over 
in France, was also advocating similar, though more 
complicated, enterprises, and his writings may have 
influenced Owen, but the latter was by far the more 
practical. 

The idea of separate communities gradually gave 
way to plans for organizing cooperative groups of pro- 
ducers who should own the machinery of single fac- 
tories in common and sell their products directly to 
the pubHc, at first through " labor exchanges," stores 
to which anybody might bring things to be sold, in 
payment for which they would receive script repre- 
senting the value of the actual time spent in producing 
the goods. These labor checks could then be used in 
purchasing other commodities in the exchange. The 
fallacy of time as a measure of value was speedily 
demonstrated and a more practical system of valu- 
ation was adopted. 

Jacob Holyoake, in his ^' History of Cooperation," 
which is largely a record of these early ideas, of Owen 
and others equally interested in solving the industrial 
difficulties, devotes one very thick volume to all the 
theories and remedies proposed. Some of them do 
indeed appear absurd to us now, but we have a whole 
century of industrial history to look back on in per- 



10 CONSUMERS COOPERATION 

spective, while these early idealists naturally could not 
yet grasp the true nature of the new conditions. At 
any rate, theirs was a divine absurdity. Chief of them 
all was Robert Owen, for he was by no means preju- 
diced in favor of his own ideas.; his mind was ever 
open to those of others. Most of his wealth went to 
spreading a knowledge of what remedies were being 
advocated and to efforts toward putting some of them 
into practice. He died comparatively a poor man. 

But Owen's appeals were not to the people most 
interested, the working people. He never proposed 
that the many enterprises he fathered and advo- 
cated should be financed by the working people them- 
selves. That was the business of either rich philan- 
thropists or the government. 

In the forms in which he advocated them, these so- 
cial experiments all failed. Yet they all possessed in 
common a vital principle which survives : the principle 
that the machines of industry should be collective prop- 
erty. Owen distinctly grasped the fundamental cause 
of the trouble — the private ownership of machinery 
performing a social function. His cure was col- 
lectivism: the partnership of all the people. Where 
he failed was in fixing the form in which this prin- 
ciple should be applied, and surely nothing less than 
a god could have fixed that, at that time. 

And his remedy missed its most important ingredi- 
ent: Democracy. 



' CHAPTER II 

THE FIRST SPROUTINGS 

Of all that large throng of idealists who crowded about 
the dominating figure of Robert Owen in the early 
years of last century the great majority were of the 
upper classes. Deeply worried as they were over the 
miseries of the masses, they were not of the masses 
themselves. Later on strong personalities rose here 
and there out of the ranks of the workers and joined 
the devoted army, but for many years they represented 
nothing but themselves. Working-class organization 
did not appear till a much later date. 

Indeed, few of these theories and ideas could have 
inspired the rank and file of the workers with hope, 
for all the schemes advocated required vast sums of 
money for their practical realization. Like idealists of 
to-day, Owen and his followers spoke of millions. 

But there is ample evidence that Owen's essential 
idea, collectivism, did make an impression on the 
working people. Or, rather, it should be said that 
they, too, in their own way conceived that idea, for 
some of them had already begun their humble experi- 
ments before Owen had proclaimed himself. These 
trifling enterprises, however, failed to attract Owen's 
attention. Like the SociaHsts of to-day, his indigna- 
tion against the injustice he saw about him rendered 
him so impatient that he wanted to change the social 
order overnight, and humble beginnings only irritated 
him. 

II 



12 CONSUMERS COOPERATION 

Now it will be noted that all the proposed experi- 
ments of the idealists centered about production. In 
fact, nearly all involved communal ownership of land, 
the source of all wealth. And there is a certain logic 
about this conception : attempting to change the social 
order by obtaining control of original sources. At 
any rate, it was clear that the predominating thought 
was to get hold of the tools of industry: the machines. 
Therefore every scheme centered at this point. As a 
theory that idea survives to this day among the politi- 
cal Socialists and, especially, in the program of the 
Syndicalists. 

But aside from the trade-unions, which were purely 
defensive, therefore of no social significance from a 
constructive point of view, it is noteworthy that the 
earliest organizations of the w©rkers took hold of the 
problem from the other end : distribution. Naturally, 
this was not the result of any social' philosophy they 
had conceived, but because this method followed the 
line of least resistance. 

Surrounded as they were by an environment of bit- 
ter hardness, they regarded the situation with a prac- 
tical eye, uncolored by th^ rosy dreams of the Utopians. 
They felt the pressure from two sides. On the one 
hand was the employer, the manufacturer, who ever 
sought to lower their wages. On the other hand was 
the storekeeper, who sold them the necessities of life, 
ever tending to raise the prices of the goods he sold 
them. 

Against the employer they presented a purely de- 
fensive front : the trade-union. He was too powerful 
to attack. But the shopkeeper seemed not so for- 
midable. To acquire collective control of the factory 
seemed hopeless. To acquire collective control of the 
distributing station, the store, seemed well within the 



THE FIRST SPROUTINGS 1 3 

realm of practical realization. Once they grasped the 
idea of collective ownership they applied it there, to 
the store. Thus they organized into consumers' so- 
cieties and opened their own stores. 

According to William Maxwell, author of " The 
History of Cooperation in Scotland," there were hum- 
ble beginnings of this nature made before the close of 
the sixteenth century. The first one of which there 
is any record was initiated in a small village in Scot- 
land, Fenwick, in 1769. It was the creation of a few 
poor w^eavers who saw in this associative effort noth- 
ing more than a means whereby they could expand the 
purchasing power of their scanty wages by a few pen- 
nies. Mr. Maxwell is able to present a copy of an 
entry in the minute book of the secretary, which prob- 
ably also served as the constitution of the society: 

"9th November, 1769. 
" This present Day it is agreed upon by the members of 
our Society to take what money we have in our Box and buy 
what victwal may be thought Nessassar to sell for the benefit 
of our society. And the managers of our society may bor- 
row what money They think Proper for that End and pur- 
pose. And when the interest is paid of what money yow 
borrow and the men received their wages for buying and 
selling thes Victwals we Deal in the Society will both reap 
the benefit and sustain the loss of them, and If any member 
of our society Pay not what Quantity of Victwals he receives 
at the end of four weeks If the managers require it of him, 
Neither him nor his shall have any more right to our soci- 
etys Victwals If he be found buying Victwals from any 
other and leaving the trade in debt of the same according to 
the option of the society. 

Alexander Walles Wm. Hendry, his x mark 

John Wilson James Broun 

Andrew Orr, his x mark William Walker 

Robert Walker William Bunten 

John Burns Thos. Barr 

J. Gemmel, his x mark." 



14 CONSUMERS COOPERATION 

An enterprise differing in nature, but based on the 
same cooperative principle, was launched in Hull, Eng- 
land, in 1795. The harvest that year had been un- 
usually bad and the price of wheat was higher than 
it had been for a generation back. Stirred up by these 
depressing conditions, the " poor inhabitants " of the 
city presented a petition to the mayor, as follows : 

" We, the poor inhabitants of the said town, have lately 
experienced much trouble and sorrow in our selves and fami- 
lies on the occasion of an exhorbitant price of flour; that, 
though the price is much reduced at present, yet we judge it 
needful to take every precaution to preserve ourselves from 
the invasion of covetuous and merciless men in the future. 
In consequence thereof, we have entered into a subscription, 
each subscriber to pay is id per week, for four weeks, and 
6d per week, for four weeks more, which is 6s 4d each, for 
the purpose of building a mill which is to be the subscribers', 
their heirs, executors, administrators, or assigns forever, in 
order to supply them flour; but as we are conscious that this 
subscription will not be sufficient to bring about this purpose, 
we do hereby humbly beseech your Worship's advice and 
assistance in this great undertaking, that not only we but our 
children yet unborn may have cause to bless you. 

Except that this latter undertaking sought and re- 
ceived outside aid, these two are each a representative 
type of a great number of cooperative enterprises 
found throughout Great Britain during Robert Owen's 
period. That there might be in them the germs of a 
mighty economic mass movement of the future the 
idealists never suspected ; they could not see in grind- 
ing flour or selling groceries a road to the social mil- 
lennium. On the other hand, the members of these 
small working-class societies themselves seemed equally 
unconscious of any social mission. 

There was one man, however, whose vision pene- 
trated clearly into the distant future. 

Dr. William King, like practically all of the social 



THE FIRST SPROUTINGS 1 5 

missionaries of his time, was not of the working classes 
himself. After having graduated from Oxford and 
Cambridge, he studied medicine and then began to 
practice at Brighton, where he soon rose to promi- 
nence within his profession and was elected a member 
of the Royal College of Physicians. He was one of 
the founders of a technical school in Brighton, where 
he and Ricardo, the famous economist, lectured from 
the same platform. Intensely interested in social 
problems, he studied industrial conditions, not so much 
at firsthand as Robert Owen, but as a theorist, like 
the scholar he was. At once those humble flour mill- 
ing and store societies attracted his attention, and so 
impressed was he by their potential significance that 
he persuaded the students of the school he had founded 
to organize such a society in Brighton, in 1827, just 
when Owen was in the midst of his propaganda for 
communist colonies. 

In the following year Dr. King began to publish, 
at his private expense, a series of essays, in periodical 
form, on cooperation, wherein he expounded his con- 
ception of the means by which the working classes were 
to emancipate themselves from their industrial slavery. 
And, in marked contrast to the hundreds of other 
writers on the same general subject who were then 
expounding their views. King addressed his remarks 
to the working classes themselves directly, in the sec- 
ond person plural. 

" This should be done," he said, in effect, '* to gain 
that end. And only you yourselves can do it/' 

There is no evidence that the working classes ever 
read the lectures addressed to them by Dr. King. 
Twenty-eight numbers of the Brighton Co operator 
were issued, and then their author and publisher sus- 
pended publication in despair. Or perhaps he felt 



i6 consumers' cooperation 

he had dehvered his message. Like many another 
prophet, he preached in the wilderness, and though 
England teemed with hundreds of intellectuals keenly 
interested in solving the great social problems, not one 
took the least notice of King's essays. Holyoake, than 
whom there never was a more verbose writer, passes 
him over with a paragraph. 

Though King's writings were inspirational, rather 
than scientific, in him the modern cooperative move- 
ment found its first theorist, its first prophet. So clear 
was his insight into the future that the subsequent de- 
velopment and progress of the cooperative movement 
has shown little deviation from the path he marked 
out for it, nearly a hundred years ago. So applicable 
are the principles he enunciated and the arguments he 
made to present-day cooperation that a summary of 
his program is worthy of presentation, not only on ac- 
count of its historical value, but because of the clear 
conception it gives of the ideals that animate the more 
intelligent leaders of the modern movement. 

Until quite recently it may be said that not one 
Cooperator had ever heard of King or his Cooperator, 
except through the one paragraph in Holyoake's remi- 
niscences. Then, some six or seven years ago, Dr. 
Hans Miiller, secretary of the International Coopera- 
tive Alliance, himself a scholar and perhaps the fore- 
most exponent of modern cooperation, w^hile engaged 
in research in the library of the British Museum came 
across a file of the old Brighton Cooperator. The 
result was that he devoted a good half of the Inter- 
national Cooperative Alliance Yearbook for 191 3 to 
an exposition of King's writings. 

'' There is no doubt," comments Dr. Miiller, " that 
King's idea of cooperation was one of social reform. 
King does not regard cooperation merely as a means 



THE FIRST SPROUTINGS 17 

of imposing limits on or exterminating the middleman, 
or augmenting the productive power of labor ... he 
hopes by means of the cooperative society to transform 
the structure of our economic life as a whole, and thus 
liberate labor from subjection to and dependence on 
capital. It is obvious from the point of view adopted 
by King that he looks upon the interest of capital and 
labor as being hostile the one to the other, though this 
view is not directly expressed in words. Without 
actually mentioning the word capitalism it is plain to 
him that if the lines hitherto followed are still further 
pursued, it will result in adding ever-increasing mem- 
bers to the proletariat. He considers it essential to 
depart from the economic system of the present day, 
which compels the impecunious worker to agree to 
work for an employer in order to gain bare subsist- 
ence. King considers cooperation the means to be 
adopted in the conquest of capitalism and its wage 
system. . . . The aim of cooperation is to enable the 
workman to work for himself and his fellow cooper- 
ators. ... A means to this end is the erection of 
stores from which members may purchase all provi- 
sions and other necessaries. Members will not, how- 
ever, gain any immediate advantage by so doing, but it 
will provide a means for the building up of a collective 
capital, which they will at no very distant date be able 
to use in employing their own members. . . . Accord- 
ing to King the main idea of cooperation is the acqui- 
sition of property, and this idea on his part separates 
him distinctly from Owen. He stands in marked con- 
trast to the latter. Owen regarded a community, 
which is a kind of agricultural-industrial and educa- 
tional society, as the only form of cooperation which 
would meet with success and for the establishment of 
which a large capital was necessary. King, on the 



i8 consumers' cooperation 

other hand, wished to develop cooperation solely by 
turning to account the power and means which the 
worker already possessed." 

Dr. Miiller then quotes King as follows: 

'' Cooperation being a subject quite new to the 
working classes, it is natural that they should be igno- 
rant of it. If it has been heard of by them at all, it 
has been in such a way as to make it appear completely 
visionary. It has always been connected Vv^ith the idea 
that in order to carry it into practice, large sums of 
money are absolutely necessary. (Obviously a refer- 
ence to Owen's schemes.) The smallest sum ever 
mentioned as sufficient for the purpose is £20,000. 
From this the advocates have gradually risen up to as 
high as a million. ... A man wants nothing but his 
wages and an honest companion to begin. If they can 
find a third to join them, they may say ' a threefold 
cord is not soon broken.' They may subscribe weekly 
toward a common fund, they may market for each 
other, they may buy large quantities of goods at once 
and so get an abatement of price — which abatement 
they may throw into a common stock." 

Thus, it will be seen, King bases his philosophy on 
the power of the workers as consumers. 

'' If a number of workmen were to join together," 
he continues, " on these principles, their capital would 
be greater and they might do great things. They 
might have a store of their own where they might deal 
in anything they wanted. Their store would enter 
into competition with other stores in serving the pub- 
lic. As the business increased, the profits and capital 
would increase. As the capital increased it would em- 
ploy the members of the society, in any way which 
might be deemed most advantageous. If there was 
a profitable demand in the public for any particular 



THE FIRST SPROUTINGS 1 9 

commodity, the members might manufacture it. If 
the profits of manufacture were not high enough to 
make it worth producing them, the members might 
easily raise their own food by hiring or purchasing 
land, and becoming, part of them, agricuhuraHsts in- 
stead of manufacturers." 

Here he prophesies what was not realized till a 
generation later : that the consumers cannot only man- 
ufacture for themselves, but reach back to the original 
source of all production — land. But over and over 
again he emphasizes beginning from the distributive 
end, as follows : 

" The .working class should begin by having shops 
(stores) of their own. These shops should belong to 
a number who should form themselves into a society 
for the purpose. . . . They should deal as much as 
possible with their own shops — by which each society 
would receive the profit upon the run of the shops, 
which now goes to the shops in general (private 
stores), by which profit, by which alone, all the rich 
shopkeepers in the world grow rich and make their 
fortunes. We say it is this profit alone which main- 
tains the splendor of the merchants and companies of 
the world. The London merchants, the Liverpool 
merchants, the Bank of England, all make their for- 
tunes out of this profit. 

*' Then, if this be so, the working classes have the 
strongest possible motives for opening shops for them- 
selves. The sum of money which the working classes 
spend each year is enormous. The profit on this sum 
would of itself be sufficient to establish many manu- 
factories. It is not the want of power, but their want 
of knowledge, which prevents their making a begin- 
ning." ■ 

" As is clearly obvious from King's expositions," 



20 CONSUMERS COOPERATION 

comments Dr. Miiller, " he recognizes that the power 
of the working classes Hes in their capacity as con- 
sumers. If the working classes were to organize them- 
selves cooperatively, and purchase all their goods from 
their own shops, they would thus accumulate, year by 
year, a considerable sum of money which would be of 
much economic importance and would enable them to 
build their own factories, acquire landed property, and 
provide work for themselves. This recognition of the 
economic powers possessed by the workers enabled 
King from the outset to reject the philanthropic social- 
ism of Owen. The latter made constant appeals to 
the prominent and wealthy members of society, re- 
questing them to furnish means for social experiments 
for the solution of social problems, while King, on 
the contrary, makes his appeal solely to the working 
classes. He is cqnvinced of the fact that they possess 
the necessary power and capability to acquire the 
requisite means for production; what they lack is in- 
sight and knowledge. The consciousness of their 
power and capability, rightly made use of, would 
emancipate them from the capitalist class." 

The above quotations, brief as they are, fairly well 
indicate King's plan. His difference of opinion from 
the Owenites cannot be too much emphasized. Both 
did agree in that they believed that the tools of indus- 
try should be collective property. But the Owenites 
were essentially revolutionists, in that they wanted 
this transition to be effected at once. They differed 
only from the majority of present-day political So- 
cialists in that they would utilize the money of rich 
people as a means, for which the latter have substi- 
tuted legislative action, political power. 

While King was an evolutionist, realizing that this 
great change could only be accomplished gradually, 



THE FIRST SPROUTINGS 21 

developing simultaneously with the growing knowl- 
edge and training of the people. Furthermore, the 
Owenites, again like many Socialists of to-day, and 
like the Syndicalists, held that the power of control 
should be scattered about among many separate, or 
trade, groups, each in possession of the tools pertain- 
ing to its special vocation. Whereas King conceived 
of the people as one broad democracy, wielding their 
power in common, to which each individual worker 
should be equally subservient. 



CHAPTER III 

THE TWENTY-EIGHT WEAVERS OF ROCHDALE 

That magnificent idealism which swept over England 
during the first twenty-five or thirty years of last 
century and which, though it included a thousand 
varying ideas and theories for the improvement of the 
social system, went under the name of cooperation, 
seemed to recede and almost disappear during the early 
thirties. To be sure, Owen's voice remained heard 
during the whole first half of the century, but his 
upper-class audience dwindled almost to nothing, and 
the working classes as a whole knew nothing of him. 

The depression which set in may in large part be 
ascribed to the wholesale failures of the schemes with 
which Owen and his followers were connected. Some 
of the leaders of the cooperative-store organizations 
had, indeed, been attracted to his propaganda, with 
the result that they, too, had become imbued with his 
big-scale conceptions and, in trying to adapt their 
small experiments to Owenite theories, had caused 
them to fail. 

Among the stores as a whole there had also been a 
great number of failures. But it is inherent in the 
nature of Consumers' Cooperation that its initial at- 
tempts do fail. Apparently the majority must fail 
until federation strengthens the units and develops 
methods of practice. 

At about this time, too, the pressure on the masses, 
augmented by the pernicious corn laws, was becoming 
so unbearable that they were much more in the mood 

22 



THE TWENTY-EIGHT WEAVERS OF ROCHDALE 2^ 

for violent revolution than for the evolutionary meth- 
ods of Consumers' Cooperation. The Bolshevism of 
that time was in the air. During this period occurred 
the mob demonstrations in favor of the People's Char- 
ter, sometimes taking almost the character of armed 
uprisings. Finally, after the corn laws had been re- 
pealed, Chartism died down and once again, after ten 
years or more, the people were cool enough to con- 
sider cooperation. 

But by this time they had little to turn to in this 
direction. The voices of the Utopians, the cranks of 
their day, were stilled. And though Dr. King was 
still alive, nobody outside the medical profession re- 
membered either him or his preachings. 

It was for this reason, rather than because of any 
new principles they introduced, that the Rochdale Pio- 
neers were then, or have since been, regarded as the 
pioneers of the cooperative movement. The story of 
their organization is rather picturesque and has been 
made much of; in fact, it is usually the sum total of 
the average American's knowledge of cooperation. 
However, as the Rochdale Society has been commonly 
regarded as a type of a truly cooperative society, it may 
be well to review the origin of the organization anew. 

In the early winter of 1843 a number of weavers in 
the town of Rochdale, in the north of England, came 
together to discuss ways and means to bettering their 
condition. There had recently been a strike in the 
flannel mills of the town followed by a lockout and 
general unemployment. Labor organization as a 
means of bettering the situation did not inspire them 
with much hope, after the experience they had gone 
through. There was little chance of raising wages 
then. But why not try to accomplish what would 
amount to the same thing through other means ; raise 



24 CONSUMERS COOPERATION 

their wages by lessening the cost of living through a 
cooperative store? 

There had been a cooperative store in the town some 
years before, and it had failed. Nevertheless, they 
decided to try again. Just previously, Jacob Hol- 
yoake, an Owenite disciple, who, however, differed 
from his earlier colleagues and the master in that he 
attached some importance to the cooperative store, had 
delivered a lecture in the town and had urged them 
to make a beginning. 

The weavers agitated the idea among themselves 
until they had increased their group to twenty-eight, 
each of whom agreed to subscribe one pound toward 
the initial capital required for the purpose of opening 
a grocery store. This money was paid up in weekly 
installments of a few pennies, but finally the twenty- 
eight pounds had been accumulated and the now fa- 
mous store w^as opened in a back street. Toad Lane, 
the members taking turns as salesmen during the eve- 
ning hours the store was kept open. 

Hundreds of just such stores had been opened be- 
fore by just such groups of workingmen. There was, 
however, a special feature about the business system 
on which the little enterprise was founded, inscribed 
in the by-laws of the society, which has sensed to dis- 
tinguish it in the history of the cooperative movement. 
As is known now, this feature had been practiced by 
earlier societies, but the Rochdale weavers made it 
widely known through their success and so made the 
name of their town a household word in every civilized 
country of Europe. 

The business plan on which the early societies had 
been operated had been various. In all of them the 
individual members subscribed certain fixed sums, 
usually one pound, toward the necessary capital. 



THE TWENTY-EIGHT WEAVERS OF ROCHDALE 25 

Some stores, among whose members idealists predomi- 
nated, sold the goods at market prices and allowed the 
profits to accumulate with the store's capital. Such 
societies rarely developed, for the reason that the 
majority of people are not idealists and seek definite 
benefits, caring little for future promises. This was 
King's plan, pure and simple. It had to be slightly 
modified before it would work. 

Other stores returned the profits to the shareholding 
members as dividends on shares, thus differing from 
ordinary joint-stock companies only in that the shares 
were scattered among a greater number of people. 
Other stores sold at cost price, or slightly above. 
These latter, naturally, had not within them the ele- 
ment of growth, and the slightest miscalculation easily 
resulted in a fatal loss. 

The Rochdale cooperators formulated a plan which 
has ever since borne the name of their community; a 
method which was, in effect, a compromise between the 
idealism of King's proposal and the inherent selfishness 
of average human nature. . 

The peculiar clause in their by-laws provided that 
goods in their store were to be sold at regular market 
prices, such as prevailed in the private stores. At 
the end of each quarter the profits, after all expenses 
had been paid, and after a substantial appropriation 
had been made to a reserve fund, was given back to 
the purchasing members, to each in proportion to the 
amount of his purchases. Capital, representing the 
shareholdings of the members, received only a fixed, 
minimum rate of interest, its rental, as it were, and 
was considered as an expense. Each member, man 
or woman, had one vote in directing the affairs of the 
society, regardless of the number of shares held, which 
was, however, usually only one. 



2.6 consumers' cooperation 

Such, in brief, is the Rochdale plan, with such minor 
variations as paying half rebates to purchasers not 
members, allowing, or not allowing, employees to 
become candidates for office, etc. The appropriation 
of a fixed proportion of the profits to education, or 
propaganda, was another Rochdale feature considered 
important in those days, before this function was 
largely taken over by a federative central body. 

The Rochdale system of returning the profits of an 
enterprise to the purchasers in the form of rebates has 
generally been considered a revolutionary innovation, 
though it must be clear that not returning the profits 
to the purchasing members would be still more revolu- 
tionary, provided they were retained as collective 
capital, in conformity to King's ideas. It will also 
be clear that had it been practicable to follow the latter 
course, cooperative stores would have developed much 
more rapidly in that the profits would have augmented 
their capital. Thus the Rochdale plan is actually only 
a modification of the principle itself. 

Yet even as it is practiced, the Rochdale system 
abolishes private profit from industry, so far as it 
reaches. In the ordinary commercial sense " profit " 
is that margin between buying and selling prices which 
the private merchant, or manufacturer, puts into his 
pocket. As King pointed out, it is from this source 
that the great private fortunes of commerce are de- 
rived. It is to this tax, levied by capitalism on the 
consuming public, that the Socialists attribute all the 
evils of capitalist industry. On this point the coopera- 
tors agree with the Socialists. Therefore, since this 
margin is derived from the consumers, they either 
return it to them or place it to their credit as collective 
capital, thereby abolishing private profit completely. 
In fact, it is no longer profit. 



THE TWENTY-EIGHT WEAVERS OF ROCHDALE 2/ 

Is it just, some may ask, that his remuneration for 
services rendered should be taken from the merchant or 
the manufacturer? 

But cooperation does not deprive the shopkeeper or 
the manufacturer, or what corresponds to these func- 
tionaries under the cooperative system, of remunera- 
tion for services rendered. Under the profit system 
the merchant or the manufacturer has largely the 
power to fix his own remuneration, this power being 
limited only by competition or the capacity of the pub- 
lic to pay his prices. Never does profit bear any rela- 
tion to cost. This power of fixing his own remunera- 
tion cooperation would take out of the hands of the 
merchant and place in the hand's of the people, giving 
him, instead, a fixed salary, or wage, approximately in 
proportion to the value of his services. Thus the in- 
dependent shopkeeper, or merchant, is transposed into 
the salaried store manager; the private manufacturer 
into the paid factory superintendent. Universally ap- 
plied, this would mean that every one of us should 
become the paid servant of his fellows. 



CHAPTER IV 

FEDERATION 

The Rochdale store, which was a successful enterprise 
from the beginning, marks the rise of what some 
writers call the Second Cooperative Movement, 
Owen's and kindred experiments being considered the 
first, though as a matter of fact there had not yet been 
any pronounced development of the consumers' organ- 
izations. That the success of the Rochdale store was 
due to the new system of returning profits to pur- 
chasers is not entirely true, as even societies beginning 
on this basis have a habit of failing before a general 
movement is established. Simple weavers though they 
were, there seem to have been among the original 
members a number of men of exceptionally good 
judgment and what is commonly called business abil- 
ity, for Rochdale was to furnish the main guidance 
in a much bigger enterprise whose establishment we 
are coming to presently. 

The '' dividends on purchase " system, however, was 
largely given credit for Rochdale's success. Its fame 
began spreading, first all over Great Britain, then, 
some years later, all over the civilized world, even to 
this country. One by one all the existing coopera- 
tive-store societies in England and Scotland adopted 
the Rochdale plan, while new societies founded on 
this basis began appearing in large numbers, especially 
in the industrial districts in Lancastershire and York- 
shire, in the north of England, and in Scotland. 
Here, for nearly a generation, the consumers' move- 

28 



FEDERATION 29 

ment was centered. Nor must this restriction to a 
limited area be forgotten in comparing the progress 
of cooperation in Great Britain with its slow develop- 
ment in this country. These early stores were close to- 
gether, within walking distance of each other, so to 
speak. The leaders, the members of the local manag- 
ing committees, could come in frequent contact with 
each other and compare notes regarding methods of 
management and propaganda and, quite as important, 
stimulate each other's enthusiasm. Many a first ef- 
fort has died through isolation. 

The Rochdale Pioneers (the Rochdale Society of 
Equitable Pioneers) had begun business in 1844, with 
a capital of very little over a hundred dollars, and 
during the next year it did a business of about three 
thousand five hundred dollars. Ten years later its 
original membership of twenty-eight had expanded 
to nearly a thousand and its yearly business was 
amounting to considerably over one hundred thousand 
dollars. And in 1859, when new developments in 
the movement were about to take place, the member- 
ship was nearly three thousand and the yearly trade 
over half a million dollars. 

But though many of the societies which were 
founded through the stimulus given them by the Roch- 
dale people failed, there were many which succeeded 
and, toward the late fifties, were showing quite as 
vigorous a development as Rochdale. By that time 
the local cooperative store had passed the experimental 
stage; some hundreds of prospering enterprises had 
proven beyond a doubt that workingmen could handle 
the distribution of their own necessities quite as effi- 
ciently as private dealers could do it for them, and 
much more economically. 

The cooperators had learned their first lesson and 



30 CONSUMERS COOPERATION 

knew it well. But, as must have been obvious to the 
least ambitious of them, there was no reason why they 
should stop there. The whole world of commerce and 
industry lay before them, and beyond that lay the 
land for whose possession all the early organizers had 
yearned. 

By combining their individual purchasing powers, 
the Cooperators had succeeded in reducing economic 
pressure to an appreciable degree. It required no deep 
insight on the part of the members of the local socie- 
ties to realize that this process of reduction could be 
carried a step further. As individuals had combined, 
so local societies could combine and centralize a really 
enormous purchasing power. The stores saved their 
members the profits of the shopkeepers; the super-co- 
operative 'society, the federation, would save them the 
profits of the wholesale dealers, the commission mer- 
chants, the jobbers, for it could deal directly with 
manufacturers and agricultural producers. 

Already in the early days the idea of a centralized 
purchasing power, a central purchasing agency, had 
been advocated by some of the leaders. The Halifax 
Society, Dr. King's creation, actually succeeded in 
getting twenty other societies to join it in such an 
attempt. Some capital had been raised, a warehouse 
had been opened in Liverpool. It existed for two 
years, and then disappeared. The time had not yet 
come. 

Now, in the late fifties and the early sixties the agita- 
tion for what w^as termed a " wholesale society " was 
renewed. But now there were behind the agitation 
men who had had experience in commercial enterprise, 
while the local cooperative societies numbered around 
three hundred. 

Back in 1852 the Rochdale Society had, at the 



FEDERATION 3 1 

suggestion of other societies, undertaken to include the 
purchases of its neighbors with its own by opening a 
wholesale department, but this proved a failure. At 
this time cooperative spirit was still so undeveloped 
that the members of the other societies could still not 
conceive of an enterprise being carried on without the 
stimulus of " profit," and they suspected Rochdale 
of ulterior motives. On the other hand, the members 
of the Rochdale Society could not yet see the advantage 
of carrying on a business for outsiders without profit. 
The venture failed then, but at a later date Rochdale 
and a number of the neighboring societies effected a 
small local federation for the purpose of grinding their 
flour in common. 

In i860, this time at the initiation of several of the 
Rochdale leaders, conferences were held by representa- 
tives from the various local societies about Manchester 
to discuss federation. The first obstacle that presented 
itself before them was the law, which seemed to take 
the point of view that workingmen should not be 
intrusted too far with the management of their own 
affairs. There was a statute which forbade one co- 
operative society from holding shares in another and 
limited the holding of landed property to one acre. 

The first business undertaken by the committee 
appointed by these conferences was to have this statute 
removed from the books. The agitation was taken 
up through members of Parliament, the local societies 
subscribing varying sums of money for the expenses. 
In these efforts the Cooperators were supported by 
Richard Cobden, the famous apostle of free trade 
and then representing the Rochdale constituency in 
Parliament. Other representatives of northern con- 
stituencies also gave their support. But over a year 
passed before they succeeded. 



32 CONSUMERS COOPERATION 

The member who presented the bill before Parlia- 
ment for its second reading spoke of some hundreds 
of societies in existence, " doing a business which in 
the course of last year amounted to the extraordinary 
and almost incredible sum of $7,500,000. The men 
responsible for this bill," he added, " are not embarked 
in a pleasure boat, but are pulling for their lives in 
a mere skiff and deserve to be protected from the 
surging billows on every side." 

But eventually the bill annulling the objectionable 
law was passed, without one voice being raised against 
it, either in the Commons or the House of Lords. The 
societies were now able to federate and carry on a 
business, with limited liability, on an equal basis with 
private corporations, Xow the move toward central- 
ized buying Avas pushed vigorously. 

In 1863 the " Xorth of England Cooperative Whole- 
sale Industrial and Provident Society " was founded 
and, not long afterward, it opened a modest office. At 
first it was intended that this central purchasing agency 
should supply its constituencies of local societies only 
with a limited line of groceries, the expenses to be 
paid out of a commission charge. But this was soon 
changed to the same system practiced by the local so- 
cieties, whereby goods were sold at market prices and 
the surplus was returned in proportion to purchases, or 
" to increase the capital of the society." Eventually 
the practice became to devote a substantial part of the 
surplus to reserve funds and the working capital and 
to return the rest to members. The business was man- 
aged by a special committee, or board of directors, 
elected by the quarterly meetings of the delegates from 
the constituent societies. 

The first half yearly report, issued in 1864, showed a 
membership of fifty-four societies, representing about 



FEDERATION 33 

eighteen thousand Cooperators. The weekly busi- 
ness of these members amounted to about forty-two 
thousand dollars in the aggregate, yet for a period 
the sales of the Wholesale Society amounted to 
only about four thousand dollars a week. This meant 
that the societies which had actually joined the Whole- 
sale and had subscribed to its capital stock were giv- 
ing it only about ten per cent, of their trade. 

An inquiry into this situation revealed one of the 
first obstacles which the Wholesale had to contend 
with. The local managers, the socialized shopkeepers, 
decidedly objected to having the functions of buying 
taken away from them. It reduced them from re- 
sponsible positions to mere clerks. Some were able 
to influence their committees against patronizing the 
central institution, though the members had voted in 
favor of it. But this obstacle, like many others, of 
which mere prejudice was not the least, was gradually 
overcome. At the end of the second six months a 
rebate of one and a half pence on the pound was de- 
clared, and at the end of the third six months this 
was doubled. In 1865, a little over a year after be- 
ginning business, the office of the Wholesale was 
obliged to move to more commodious quarters. By 
1866 over two hundred societies had joined. 

The establishment of the Cooperative Wholesale So- 
ciety, to which its first long name has since been re- 
duced, marked a very important turning in the prog- 
ress, not only of English cooperation, but, as will 
appear later, of the whole world movement, already 
begun in many of the Continental countries at that 
time. As was obvious in the beginning, it was not of 
marked benefit to the larger societies, which were al- 
ready able to buy in big quantities and deal independ- 
ently with manufacturers and agricultural producers, 



34 consumers' cooperation 

but the majority of them joined through the en- 
thusiasm of their leading members. It was to the 
smaller units of the movement that the Wholesale 
came, often as a saving institution. First of all, it 
solved the discouraging problem of buying on the 
wholesale market, a difficulty especially terrifying to 
amateurs. It saved also the expense of buying : not 
only the higher salaries which must be paid men with 
such ability, but the time which they must devote to 
this function. It was far better able to insure qual- 
ity and purity, since it could afford to employ men 
who were experts in judging. Its growing purchasing 
power could enable it to obtain better bargains; this, 
of course, was one of the chief arguments in its 
favor. It saved the stores the profits of the middle- 
men. Finally, it encouraged the formation of new 
societies, thereby providing a stimulus for the further 
expansion of the movement, for it eliminated many of 
the important causes of failure. Bad business man- 
agement is undoubtedly the chief cause of failures, and 
this again resolves itself into the inability of inexperi- 
enced persons to buy as cheaply as experienced trades- 
men, with whom they must compete. Disloyalty, an- 
other fatal disease to young societies, is itself only a 
result of bad management, since poor quality of goods 
at prices higher than elsewhere discourages enthusiasm 
quicker than any other cause. Under the wing of 
the big Wholesale, the newly hatched societies had 
not these initial difficulties to fear; they began their 
careers full-fledged, as it were, enjoying all the ad- 
vantages which the older societies had only gained 
from a long and grueling experience. Added to this, 
there would come occasions when the Wholesale could 
offer financial assistance to local societies up against a 
critical situation. 



FEDERATION 35 

And, incfeed, from now on began the steady increase 
of the consumers' cooperative movement in Great 
Britain. This growth which it encouraged reacted on 
the Wholesale itself, which rapidly expanded. At the 
end of the first five years, in 1868, nearly 60,000 
consumers were affiliated with it, through their local 
societies, while the sales for the year amounted to con- 
siderably over $1,600,000, as compared to $259,000, 
the sales during the first year. At the end of ten 
years, in 1873, the affiliated members numbered 134,- 
2^6', while the sales for the year were up to nearly 
$6,000,000, on which the surplus savings amounted to 
over $55,000. 

In 1872 a banking department was added to this 
central purchasing agency, which was to be an im- 
portant factor in a new development imminent at 
this time. Post-office savings banks were at this time 
unknown and local-store members were in the habit 
of depositing their savings with the stores. These 
savings were centralized and furnished the movement 
with a tremendous capital. 

Meanwhile, in 1868, the Scottish cooperative stores, 
observing the success of the English federation, in- 
vited the latter to establish a branch in Scotland, but 
the management committee of the English Wholesale 
was of the opinion that this would be spreading over 
too wide a territory and advised the Scots to establish a 
Wholesale of their own. This they immediately did, 
with the active assistance and guidance of the Eng- 
lish. 

This second British Wholesale Society, having a 
smaller territory to cover, has never equaled the Eng- 
lish institution in size, but in proportion its develop- 
ment and progress was quite as marked. Later these 
two central institutions, the one in Manchester, the 



36 consumers' cooperation 

other in Glasgow, were to form a partnership in spe- 
cial enterprises, as when they jointly acquired tea 
estates in Ceylon for the production of tea under their 
own control. But these joint enterprises were only 
those of such a nature as could afford economy in 
concentration. 

And here, at the end of the first nine or ten years, 
just before they embarked on another very important 
development in the cooperative movement, we leave 
these two democratic institutions while we consider, 
briefly, a second form of federation which had al- 
ready been effected among all the societies of Great 
Britain. 

As already noted, a wholesale society has one very 
specific function to perform for its constituent mem- 
bers: to supply them with merchandise. It is purely 
a business union, in the hands of men who have a 
certain limited work to perform. 

Yet there are other very important aspects to co- 
operation other than the commercial. Quite as im- 
portant, if the benefits were to increase, was bringing 
more members into the movement, whether into 
already existing societies, or as new societies. This 
could best be accomplished through organized propa- 
ganda. Publicity, we might call it, corresponding to 
the advertising of private industr}\ 

In the early stages each member possessed of the 
cooperative enthusiasm naturally assisted in this work, 
speaking before small audiences of his fellows, or *' go- 
ing after them '' individually. But it is not every per- 
son, no matter how sincere, who has the power of 
presentation and persuasion. So this work was grad- 
ually relegated largely to specialists : orators and lec- 
turers. Then, too, the printed word must be brought 
into use; leaflets, pamphlets, books, periodicals, must 



FEDERATION 37 

be published, to spread a knowledge of cooperation and 
what it could do for the people. Small societies could 
not undertake this work very effectively, so a number 
would combine, perhaps on speakers and printed litera- 
ture, at first. 

Next, there was the question of formulating stand- 
ard rules and modes of procedure, with which new so- 
cieties might be guided to success. Rochdale, as an 
illustration of this need, was for years flooded by 
letters of inquiry regarding such matters, some of them 
hard to determine because they had not yet been 
formulated. Here, again, the leaders of various so- 
cieties came together to compare experiences. 

So it came about that another federation was grad- 
ually formed, quite aside from the business federation. 
True, one federation might accomplish both func- 
tions, propaganda and business, and this is actually 
done at the present time in several countries, but ex- 
perience has proved that a separate organization for 
each gives the movement more elasticity. 

The desire to exchange experiences had led to a 
number of conferences in the north of England. 
Gradually these conferences had become more regular, 
formal, and expanded into district conventions. In 
185 1 there was a general convention of the Yorkshire 
and Lancastershire societies, held in Manchester, at 
which a committee was elected to prepare model 
rules for new cooperative societies. Nine years later 
these same societies organized a permanent Confer- 
ence Association. Finally, in 1868, a national con- 
ference was held in London, to which all the societies 
in Great Britain were invited to send delegates. At 
this national convention a committee was elected, which 
made arrangements for the first national cooperative 
congress, which was, accordingly, held next year, 1869. 



38 consumers' cooperation 

Since then the general British movement has held regu- 
lar yearly congresses, each in a different locality. 

From the first congress sprang an '' executive 
board," to carry out the orders of the congress dur- 
ing the year, being just what its name indicated. 
Within a short time this was expanded to a permanent 
Central Cooperative Board, in which the movement 
was represented in five sections, or districts. This or- 
ganization later developed into the present British 
Cooperative Union. 

The Cooperative Union is, first of all, the educa- 
tional body of the British Cooperative Movement. 
Each yearly congress decides what character this edu- 
cation, or propaganda, shall assume; what constitutes 
true cooperative principle and method. Some have 
referred to these congresses as '' the British Coopera- 
tive Parliament," but its character comes somewhat 
short of this. In the early years it did, indeed, at- 
tempt to dictate to the business federation, but its 
impotency as a legislative body for the movement was 
quickly demonstrated, as we shall have occasion to 
show later. 

Aside from carrying on a country-wide propaganda 
through lectures, pamphlets, books, and other pub- 
lications, the Union acts as an advisory body to new 
societies, for whom it issues model rules, systems of 
bookkeeping, and other such practical literature. 
Sometimes it sends agitators into unorganized com- 
munities to encourage the formation of new societies, 
but this policy is no longer carried out as much as 
formerly, Great Britain being now practically cov- 
ered from end to end by cooperative organization. 
The Union also maintains a parliamentary committee 
to guard its interests in Parliament; to see that the 
private traders do not 'succeed in passing adverse leg- 



FEDERATION 39 

islation against the movement, etc. That it accom- 
plishes a great service for the local societies is obvious 
from the fact that practically all the British societies 
have joined the Union, the census figures of the 
government being very little larger than those re- 
ported by 'the Union at the yearly congress. 



CHAPTER V 

COOPERATIVE PRODUCTION 

With the complete and successful operation of the 
two British wholesale societies cooperation had pene- 
trated within capitalist industry to the point of manu- 
facturing; production. It had covered, within its own 
field, the whole business of distribution. It extended 
from the doors of the farmer or the manufacturer to 
the door of the ultimate consumer, eliminating there- 
from the shopkeeper, the wholesaler, jobber, and com- 
mission merchant. And there it paused for some 
years, while it consolidated the positions it had won. 
And there, according to the opinions of many, includ- 
ing some prominent economists, it must halt forever. 
Wherefore the name, '' distributive cooperation." 

Radical economists, including no less a person than 
Lasalle, have referred to consumers' cooperation with 
unhidden contempt, a penny-saving device, of no so- 
cial significance. That they should have been misled 
in their understanding of cooperation is not to their 
discredit, for, as we shall see presently, all the litera- 
ture arising from the movement, with the exception 
of some recent essays and books, has been the product 
of men who themselves never realized the true nature 
of Consumers' Cooperation. 

As the critics have pointed out, not without rea- 
son, so long as the distributive system of the consum- 
ers' organizations is divorced from its sources of 
supply, it remains economically in chains, socially in- 

40 



COOPERATIVE PRODUCTION 4I 

significant, truly a mere device for reducing the cost 
of living by a limited percentage. 

Even as such it would inevitably fail in its purpose. 
Wages, as Lasalle pointed out, tend automatically to 
remain at the level of bare subsistence. Labor organ- 
ization may indeed force wages upward. But then 
invariably the cost of living follows the upward course. 
When the coal miners of Pennsylvania forced a raise 
in their wages, in 1903, the price of coal was raised 
more than sufficiently to make up the loss to the coal 
operators. The rise in the price of coal was felt by 
ithe whole body of the working classes, as consumers, 
though only the miners had benefited by the rise in 
wages. Higher prices for coal, also, automatically 
brought higher costs in manufacturing, for which the 
manufacturers were bound to recoup themselves by 
higher prices for their commodities. Thus the public 
at large, and not the employing class, more than paid 
the miners their rise in wages. Another illustration 
was the Lawrence strike, in which the strikers gained 
a ten or fifteen per cent raise in wages. Simultane- 
ously the cost of cotton goods went up from fifteen 
to twenty per cent. 

This tendency on the part of the cost of living, to 
rise with wages, cannot be permanently checked, even 
by a general system of cooperative distribution. For 
the fixing of the prices is not with the retailers, nor 
with the wholesalers, but with the manufacturers and 
the agricultural producers, outside the control of the 
cooperative stores. 

This defect in their system the Cooperators of 
Great Britain realized at a very early stage of their 
experience. They grew familiar with the practice of 
wholesalers and, later, manufacturers to raise prices 
on Cooperators, " because they can afford to pay 



42 CONSUMERS COOPERATION 

more." Hence rose the cry of " a cooperative source 
of supply." 

In other words, the Cooperative Movement must get 
control of production. 

Chief among those who realized this need and pro- 
posed to supply it was a small but very influential group 
of social reformers calling themselves Christian Social- 
ists. They were the logical successors of the early 
Owenite ideahsts, educated and mostly wealthy men, 
most prominent among them being Vansittart Neale, 
Thomas Hughes, author of '' Tom Brown's School 
Days," Charles Kingsley, still more famous as an 
author, Frederick Maurice, and John Ludlow. They 
were essentially Owenites in all except one feature. 
Owen had been anti-church, even anti-religious, in an 
orthodox sense. This had made him widely disliked. 
These men were all stanch members of the established 
church; therefore the qualifying adjective before their 
socialism, to distinguish themselves from the earlier 
Owenites. Closely allied to them was Jacob Holyoake, 
except that, like Owen, he rejected the religious quali- 
fication. To this day Holyoake is still widely regarded 
as the historian of the British cooperative movement, 
on account of his extensive writings on certain phases 
of it. 

Like Owen and his followers, the Christian Social- 
ists clung to the idea of a close interpretation of the 
formula of the collective ownership of the tools of 
production. To them it meant that the actual workers 
in a factory plant should owm and control that plant, 
and divide its commercial profits among themselves. 
They could not see the broader collectivity of society 
at large. But they modified Ow^en's ideas of com- 
munistic communities considerably. The modified 
form of cooperative production which they advocated 



COOPERATIVE PRODUCTION 43 

and promoted they imported from France, where it was 
initiated by the followers of Buchez and, at a later 
period, developed to a considerable extent under the 
patronage of the French Government, to serve as 
a check on trade-unionism. 

The activities of the Christian Socialists began in 
1848, when they issued an organ in which they at- 
tacked vigorously the evils of the capitalist system, 
especially sweatshop industry. " Alton Locke," 
Kingsley's novel, was part of this propaganda. 

Two years later they organized the *' Society for 
the Promotion of Workingmen's Associations," which 
carried on a special propaganda for " self-governing 
workshops," the form of enterprise which the Chris- 
tian SociaHsts contended later would give the con- 
sumers' stores their cooperative source of supply. 

The principles on which these productive societies 
were founded were never very clearly defined, being 
subject to all sorts of compromise so that the actual 
enterprises which came into existence were divided into 
an endless number of *' types." But the main idea 
seemed to be that a certain group of workingmen 
should organize themselves into a society, each should 
subscribe some money toward the working capital of 
a productive enterprise, should have a vote in its 
management, and should share in its profits when the 
products of the enterprise had been sold on the open 
market. This was the ideal. The Christian Socialists 
saw the whole world of industry eventually trans- 
formed into a vast number of such independent manu- 
facturing groups. They were the forerunners of the 
present-day Syndicalists, whose theory it is that the 
workers in every separate industry should own and 
control all the material property and machinery con- 
nected with that industry. The miners should own 



44 CONSUMERS COOPERATION 

the mines, the railroad men should own the railroads 
and, presumably, as Mrs. Webb remarks, the school- 
teachers should own the schools and the street sweep- 
ers should own the streets. At any rate, there is 
no logical dividing line between practical possibility 
and absurdity, if the idea is followed out to its 
end. 

The first batch of these enterprises which the Chris- 
tian Socialists turned out and supported failed as 
completely as did Owen's communistic schemes. 
From this experience they saw that it was one thing 
to manufacture commodities, but quite another thing 
to market them. Vaguely they sensed the important 
truth that distribution must be organized before pro- 
duction; that a manufacturer must prepare an outlet 
for his goods. In the capitalist world salesmanship 
provides for this. The promoters of the self-govern- 
ing workshops had not provided for salesmanship. It 
came to the Christian Socialists that the organized 
cooperative stores would be the ideal market for their 
self-governing workshops. The two together would 
form a complete cooperative commonwealth. The 
self-governing workshops would have their market; 
the stores would have their cooperative source of sup- 
ply. They were even willing to concede that the store 
societies should have a voice in the government of the 
productive plants of the manufacturing societies, 
though they thought it no more than right that the 
store societies should furnish the greater part of the 
capital. 

With these ideas, the Christian Socialists were, 
withal, enthusiastic supporters of the consumers' move- 
ment. Vansittart Neale and Hughes, both lawyers, 
had been hard-fighting champions for the movement 
in Parliament and the courts; it was Neale who had 



COOPERATIVE PRODUCTION 45 

drafted the bill making the Wholesale possible. 
Again, Neale had been the leading spirit in the organ- 
ization of the Cooperative Union, of which he was 
general secretary for over twenty years. Holyoake, a 
firm believer in the economic theories of the Christian 
Socialists, had lectured and agitated for the coopera- 
tive stores ever since he had urged the Rochdale weav- 
ers to organize their store. Aside from this, they were 
all men of such undoubted sincerity, so obviously 
self-sacrificing and unselfish, and of such high ideal- 
ism that even those who later became their bitterest 
opponents could never refer to them personally ex- 
cept with words of deepest respect. Thus their moral 
sway, their influence, over the movement was almost 
autocratic. And this influence they wielded to its 
fullest extent in favor of their economic theories. To 
this day the literature of the Cooperative Union is not 
entirely purged of their economic fallacies, while all 
the books that have been written on the subject of 
cooperation, with a few late exceptions (and Mrs. 
Webb's treatise, published in 1891, which first ex- 
posed their unsoundness), have been from the Chris- 
tian Socialist point of view, either ignoring or con- 
demning the subsequent course followed by Consum- 
ers' Cooperation into the field of production. Because 
of this, there still prevails in this country, where ex- 
tensive efforts were made to establish self-governing 
workshops, the impression that cooperative production 
has been given a fair trial — and has failed. 

Meanwhile, in the early seventies, the English 
Wholesale was being confronted by a variety of new 
problems, none very important in itself, but all com- 
bined, served to guide the consumers' movement to- 
ward the long-sought goal: a cooperative source of 
supply. 



4^ consumers' cooperation 

First of all, the loan deposits from the members 
were troubling the local societies. In spite of the 
low rate of interest paid on these savings in trust, they 
accumulated in such volume that the local societies had 
trouble to decide how to invest this money. Some 
took shares in private corporations, especially in rail- 
road securities, but it was very soon discovered that 
this was a bad cooperative principle; giving the op- 
ponents of the movement the use of cooperative capital. 
So the local societies began shifting their troubles over 
to the Wholesale by turning the money over to it, 
especially after the banking department was opened. 
Thus the Wholesale found itself in possession of more 
capital than it knew what to do with. 

Another annoyance to the Wholesale officials, at 
about this time, was the tendency on the part of private 
manufacturers to either discriminate against it, or boy- 
cott it entirely. In fact, one trade journal had set 
deliberately to work to organize a general boycott of 
the cooperative movement, though not with any marked 
success. Undoubtedly wholesale merchants and other 
middlemen were able to bring pressure to bear on 
individual manufacturers and force them to boycott 
at least the Wholesale. 

These were both factors which led to the mo- 
mentous decision taken in 1872. In one of the quar- 
terly meetings held that year it was suddenly proposed 
that the Wholesale engage in manufacturing goods for 
its own constituents. 

From that moment the movement was divided into 
two strongly opposed factions, exciting a controversy 
between the leading spirits on each side which was 
saved from becoming bitter only by the mutual re- 
spect they really bore for each other's personalities. 
Vituperation certainly never has been a feature of the 



COOPERATIVE PRODUCTION 47 

cooperative movement, either in its debates or its 
journalism. 

The Christian Socialists were naturally opposed to 
this step. By this time they had succeeded in in- 
fluencing a great number of the stores to support 
productive enterprises based on their theory. 
Through this support a number of these self-govern- 
ing workshops had been able to establish themselves, 
though they were now no longer " self-governing." 
Also, they had persuaded the Wholesale to act as 
agents for a great number of others, thus opening a 
market for them. 

If the Wholesale now engaged in manufacturing it- 
self, that would mean the death of the productive so- 
cieties. Naturally, the stores owed first allegiance to 
the Wholesale enterprises. This would close the con- 
sumers' organizations as a market to the self-govern- 
ing workshops. 

The Christian Socialists themselves were in a small 
minority, the rank and file having little opinion, one 
way or another. But their influence was strong. 
Even on the management committee of the Wholesale 
there were several individuals who opposed the pro- 
posed step, through their sympathy for Vansittart 
Neale, Hughes, and their group. 

But "*ecoi»©mic deteiyninism," to use Socialist ter- 
minology, carried the day. The economic advantages 
in favor of the Wholesale going into manufacturing 
were so obvious that the delegates at the meeting voted 
in favor of it by a large majority. 

First, there were the two considerations already 
mentioned. With more capital than it knew how to 
dispose of to advantage, the Wholesale could be in- 
dependent of any manufacturer who chose to discrim- 
inate against it. 



48 consumers' cooperation 

Then, there was a magnificently organized market 
behind every productive enterprise the Wholesale 
might choose to open. It needed no large business ex- 
perience for each delegate to see the big economy that 
might thus be effected, through the elimination of the 
gigantic expense of advertising and salesmanship. 
Every true Cooperator would be a walking advertise- 
ment for the Wholesale products. Where a private 
manufacturer would have to spend vast sums of money 
in building up the " good will " of his trade, the Whole- 
sale enterprises would begin business already provided 
with this expensive element to commercial success. 
There were at that moment one hundred and fifteen 
thousand heads of families affiliated with the insti- 
tution. W^hat would not a private corporation give 
for the " good will "of such a market? Surely they 
would grant their good will to the Wholesale enter- 
prises, for would they not be theirs ? Aside from that, 
there were another three hundred thousand Coopera- 
tors, not yet affiliated, but strongly sympathetic. 

These were the chief arguments which persuaded the 
assembled delegates at that historic meeting to re- 
spond w4th a roaring " aye ! " when the chairman put 
the question to the house: shall the Wholesale begin 
production on its own account? 

Shortly after a piece of ground was bought at 
Crumpsall and a factory for the manufacture of bis- 
cuits, or crackers, as w^e call them, was built on it. 
In the following February the committee announced 
that the plant was in successful operation. In the fol- 
lowing November a boot and shoe factory was es- 
tablished and a hundred men were set to work mak- 
ing boots and shoes exclusively for British Coopera- 
tors. And less than a year later cooperative soap was 
being delivered to the stores. But here the Wholesale 



COOPERATIVE PRODUCTION 49 

paused for a while. With these enterprises it experi- 
mented for some years, before it went ahead again. 

Meanwhile, how were the Christian Socialists tak- 
ing this decision against their theories ? 

Not quietly, by any means. Fighters to every fiber 
of them, convinced that they were right to the point of 
fanaticism, they took up the battle against what they 
considered a betrayal of fundamental cooperative prin- 
ciple and waged it to the death, through more than 
twenty long years. 

Vansittart Neale had been present at the Wholesale 
quarterly meeting at which the famous resolution had 
been passed. So powerful was his influence that he 
succeeded then and there in having another resolu- 
tion passed, by which the workers in the manufacturing 
plants of the Wholesale should " share in the profits." 

At a later meeting E. O. Greening, another partisan 
of the self-governing workshop theory, moved for 
the appointment of a committee to report on '' deter- 
mining the relations between the Wholesale and its 
manufacturing establishments on a sound cooperative 
footing." This led to the proposal that each manu- 
facturing establishment should be a separate enter- 
prise; that while the Wholesale should finance it and 
have a voice in its control, the workers in each es- 
tablishment were to control also and have half the 
*' profits." This proposition was turned down. 

Defeated in the quarterly meetings of the Whole- 
sale, the Christian Socialists now turned to another 
quarter — the yearly congress. Here they might ex- 
pect to exert more influence, for several reasons. 
Vansittart Neale was secretary of the Cooperative 
Union, which organized the congresses. And the dele- 
gates to the congress included representatives from a 
number of the self-governing workshop societies, 



50 consumers' cooperation 

which were members of the Cooperative Union but, by 
their very nature, could not well be members of the 
Wholesale. 

At the yearly congress held in 1873, at Newcastle, 
the Christian Socialists brought up the question of co- 
operative production and the form which the move- 
ment should adopt. And here their efforts resulted 
in a partial victory. The congress approved of the 
self-governing workshop but, naturally, did not quite 
declare that the Wholesale should turn over its manu- 
facturing plants to the employees of those plants. It 
did, however, declare for the " participation of the 
workers in profits and management " of enterprises 
in which they were engaged. 

To this extent, at least, the congresses were always 
on the side of the Christian Socialists, and even to 
this day, as a body which is supposed to formulate co- 
operative principle, the Cooperative Union has no very 
definite ideas as to what constitutes true principle in 
cooperative production. Its official textbook extols 
both, naively unconscious of the impression that must 
strike the student : that the two systems are mutually 
exclusive. For definite principles one must turn to 
the Wholesale, the true parliamentary body of the 
English cooperative movement. 

The Wholesale, naturally, would take no instruc- 
tion from any other body than the delegates to its 
own quarterly meetings. On the other hand, how- 
ever, the committee of management did recognize the 
resolutions of the congress as a moral influence, put- 
ting them in a divided state of mind that was to 
prove almost disastrous to the whole institution. 

As has already been stated, the Wholesale had taken 
up the functions of banking. It received deposits 
from the consumers' societies, from trades-unions and 



COOPERATIVE PRODUCTION 5 1 

Other working-class organizations, and from a number 
of self-governing workshops. But in regard to the 
latter, the tendency was all the other way. Numbers 
of these began turning to the Wholesale for loans and, 
considering the attitude of the congress, the Whole- 
sale officials felt that they could not refuse these ap- 
peals for financial assistance, especially in special in- 
stances where they were strongly recommended by 
such leaders as Vansittart Neale, Hughes, and others. 

The first disaster came through the failure of the 
Ouseburn Company, a self-governing workshop so- 
ciety near Newcastle, engaged in the manufacture of 
steam engines. To save itself from impending bank- 
ruptcy, the chief official of this company had previously 
organized a '' cooperative bank " in Newcastle, whose 
shares had been sold to both cooperative societies and 
individuals. This bank had also been supported by 
the Christian Socialists, who were strongly opposed 
to the banking system of the movement being in the 
hands of the Wholesale. It should be a separate insti- 
tution, they contended, and here, at least, there was 
some soundness to their argument, for it is not alto- 
gether well that too much power should be given over 
to one group of officials. But in this case the alterna- 
tive institution was not even a separate federation. 

The Ouseburn Company failed, and the Wholesale 
lost in the neighborhood of forty thousand dollars. 
Then followed the bankruptcy of the Newcastle bank- 
ing concern. Nearly all the cooperative societies in 
this region were involved, either as shareholders or 
as depositors. The result was that there was a heavy 
run on the Wholesale's banking department, where 
they had also placed deposits. 

In such serious straits was the Wholesale that its 
chairman had to journey to London to arrange with 



52 CONSUMERS COOPERATION 

a London banking firm for the carrying over of a 
debit balance amounting to a quarter of a million 
dollars. Even after that the situation was so desper- 
ate that an appeal had to be made to some of the 
larger consumers' societies, and the Rochdale society, 
among others, responded loyally with substantial 
loans. 

" This was in 1876-7," says Percy Redfern, in his 
" History of the C. \V. S.,'"' " and with two or three 
years more of trouble ahead it was fortunate for the 
stores' federation that its constitution, rules, and meth- 
ods secured to it such great reserves of strength." 

It was during this period, about the middle seven- 
ties, that the rapid development of manufacturing, both 
in Great Britain and abroad, brought to a climax the 
tremendous and growing demand for coal. Though 
mines Avere opened one after another and the mining 
industry expanded, the demand ever kept ahead of 
the supply. This condition had encouraged the or- 
ganization of a great number of colliery societies, 
based on the self-governing workshop principle, these 
societies obtaining leases on coal lands and operat- 
ing them cooperatively. 

AMiile the boom lasted these little enterprises made 
big profits for their members. Yet more continued 
to be organized and, under pressure from the Chris- 
tian Socialists, the Wholesale bank extended loans 
here and there, becoming deeply involved. One of 
these colliery societies, the Bugle Horn, succeeded in 
squeezing nearly a quarter of a million dollars out 
of the "Wholesale bank and a number of big local 
societies. 

Finally the boom broke, as booms inevitably do. 
The little self-governing workshop societies, naturally, 
with their slender resources, were the fi^rst to go. 



COOPERATIVE PRODUCTION 53 

Dozens of them failed. The Wholesale, together with 
some of the big store societies, was heavily involved. 
On the Bugle Horn the Wholesale lost one hundred 
thousand dollars alone. 

To the credit of the Christian Socialists it must 
be said that there were individuals among them who 
lost heavily; they had had the conviction of their 
theories. Nor did any of them ever reproach the 
managers of the Wholesale for the losses which were 
suffered by that institution. 

But the Wholesale Society was forever done with 
the workshop societies. Barely, through its endeavors 
to give financial support to the experiments of visionar- 
ies, did it escape a disaster which must have delayed 
the progress of the whole movement for another gen- 
eration. Henceforward it presented a firm and un- 
broken opposition to the attacks of the Christian So- 
cialists. 

As for these earnest, if mistaken, champions of the 
workingmen, even they seem to have been impressed 
by the failures. At any rate, we hear little more of 
self-governing workshops as such. They modified 
their theories considerably, in their propaganda, at 
least. 

Instead, they took up the slogan of profit sharing, 
the *' participation of the workers in industry." To 
them and their present-day successors such an estab- 
lishment as the Ford automobile company and our 
United States Steel Corporation are on a more direct 
road toward the cooperative commonwealth than the 
Wholesale Society of Manchester, because these pri- 
vate corporations give a bonus on wages, a share in 
profits, to their employees. By this method, they be- 
lieved, the workers would obtain an ever-increasing 
share in the control of the industries and, perhaps, 



54 CONSUMERS COOPERATION 

finally obtain full control, ousting the private capital- 
ists. 

As for the workshop societies, they survive only as 
a conception. They were extensively experimented in 
in this country twenty or thirty years ago, notably in 
Minneapolis, where the coopers formed independent 
groups to manufacture barrels for the flour mills. 
And even as a certain school of economists was point- 
ing them out as the heralds of a new industrial order, 
the flour mills substituted sacks for barrels — and 
there were no more independent cooperage shops. 

To us, living in an age of billion-dollar corporations, 
it is easier to see the fallacy of a manufacturing plant 
being capitalized and administered by the actual work- 
ers engaged within its four walls. The Christian So- 
cialists clearly did not foresee the present centraliza- 
tion of industry into huge plants costing hundreds of 
millions of dollars, wherein single workers may be op- 
erating machines costing hundreds of thousands of 
dollars. They could not get away from the old con- 
ception of each worker owning the tools in his own 
hands, as he did in the handicrafts period. That all 
the workers together, as a mass, should combine, and 
own and control collectively all the machinery of pro- 
duction was a conception they would not face. It is on 
this latter principle that the modern cooperative move- 
ment has developed itself. 



CHAPTER VI 

COOPERATION SPREADS ABROAD 

It was essentially logical that cooperation should have 
its inception in Great Britain. A populous island, 
with many good harbors, Great Britain was by nature 
destined to be a great commercial and manufacturing 
center. There, consequently, the ingenuity of man 
was stimulated to the invention of steam-driven ma- 
chinery. Thus here was enacted the first scene of the 
great industrial revolution. With the new system 
of industry came the attending evils of unemployment 
and poverty and all their resulting problems. There, 
then, the remedies for those evils would first be 
formulated. And cooperation is the essence of all 
those remedies. 

With the institution of railroad transportation the 
new industrialism spread into other countries, thus 
creating there the same conditions which had created 
and developed cooperation in England. 

We need not follow the spread of cooperation over 
the Continent too closely; in each country early ex- 
periences, countless experiments, and countless fail- 
ures were very much the same as in Great Britain. 
Every national cooperative movement acknowledges 
its indebtedness to the Rochdale Society. Its simple 
system seemed adapted to all those many environ- 
ments. Rochdale was undoubtedly the first perfect 
bloom whose seeds, on ripening, were wafted to all 
four corners of the civilized world. Wherever the 
soil was fertile and the conditions propitious, as they 

55 



5^ consumers' cooperation 

were everywhere, sooner or later, there they germi- 
nated and developd into plants as perfect as the parent 
and usually true to type. 

It is a curious fact, considering the tardy develop- 
ment of cooperation in this country, that the United 
States ranks as one of the first in following the ex- 
ample of the British workers in their attempts at co- 
operative experiment. In the very year that the little 
store in Toad Lane, in Rochdale, was opened to 
business, in 1844, a Boston tailor, John G. Kaulback, 
organized a somewhat similar enterprise which in the 
following year became a regular store, the first of a 
series which became quite a widespread movement in 
the New England states. But that we shall consider 
later, in a special chapter. 

Nearly all the European countries seem to have 
witnessed attempted organizations of consumers dur- 
ing the fifties, following the social unrest created by 
the revolutionary disturbances of 1848, a fact which 
may deserve special notice at this time, when the 
atmosphere is charged with labor unrest and Bol- 
shevism. Naturally, there are no detailed records. 
Who would be interested in the attempts of a few 
workingmen to cheapen the cost of living by pooling 
their little household purchasings? As in Great 
Britain, the movers themselves were unconscious of 
any social significance attached to their efforts, for 
their motives were purely utilitarian. Yet some of 
these organizations succeeded, grafted the Rochdale 
system on their enterprises when they heard of it, and 
survived to become great economic institutions of 
the present day. 

The first widespread knowledge of Rochdale seems 
to have been acquired in Europe during the early six- 
ties. During that decade the system was adopted in 



COOPERATION SPREADS ABROAD 57 

practically all countries. By that time the by-laws 
of the Rochdale Society could be found in transla- 
tion in all the languages of the Continent, and in 
some it was being spread broadcast to awaken a social 
consciousness among the people. The twenty-eight 
weavers, at least, had been fully conscious of a great 
ultimate aim, for in those by-laws there are sugges- 
tions of a wonderfully reconstructed society, as in 
*' that as soon as possible this society shall proceed to 
arrange the powers of production, distribution, educa- 
tion, and government, etc." Everywhere this spirit 
was accepted with the method. Not even now has 
the name of Karl Marx acquired such universal sig- 
nificance among the masses of all lands as did the 
name of this grimy, English manufacturing town, the 
Mecca of cooperation, as a Belgian pilgrim termed 
it, on a visit to the famous store. It was, in fact, 
the gospel of Dr. King, who had preached it unheard. 
Now, in the early sixties, the people seemed prepared 
to listen. 

The Swiss afford some of the earliest records on the 
Continent. In 1851 was founded the Zurich '' Kon- 
sumverein," the first occasion on which this significant 
German word was used. This enterprise consisted 
of a bakery, which prospered, so that two years later 
a grocery store was opened with the collective capital 
created by the bakery. The society is still in existence, 
one of the biggest in Switzerland. In 1865 another so- 
ciety, on Rochdale principles, was founded in Basel; 
to-day its membership includes practically the whole 
city, which is one of those communities from which 
cooperation has almost entirely banished private trade. 

In France the first consumers' societies of which 
there are any record appeared in 1866. But in spite 
of an early start, progress here was slow. Until quite 



58 consumers' cooperation 

recently it remained one of the backward countries; 
for France was the original home of the self-governing 
workshop. Some hundreds of them were organized in 
Paris and its vicinity immediately after the revolu- 
tion of 1848 and subsidized by the government with 
capital and work, or custom. Here, as in England, 
the upper classes became keenly interested in solving 
the troubles of the working people for them, and 
wherever that was the case natural evolution had a 
struggle with man-made theories and was often 
checked by them temporarily. 

Denmark, which was to be the first to imitate the 
British in establishing a wholesale society, founded a 
genuine Rochdale store in Thisted, in 1867. Here 
consumers' societies appeared, not among the indus- 
trial workers in manufacturing centers, but in the 
rural communities, among the small peasants and ag- 
ricultural workers. 

Germany, like France and England, was troubled in 
the beginning with theorists. Chief of these was 
Schulze-Delitzsch, the so-called founder of coopera- 
tion in Germany. It was not so much his theories, 
however, which gave an initial character to German 
cooperation, as his natural conservatism. Ideals, in a 
higher sense, he had none; he was essentially a re- 
former, and anything that tended toward revolution he 
deprecated. More practical than the English or 
French theorists, he had less imagination, less vision. 
All forms of joint effort seemed good to him, but they 
must all remain within bounds. They must not en- 
croach on middle-class privileges. 

In the early fifties Schulze-Delitzsch began a vig- 
orous propaganda for joint effort, and being a force- 
ful writer, he made a wide impression and gained a 
large following among people of the middle classes. 



COOPERATION SPREADS ABROAD 59 

The spontaneous workingmen's organizations which 
appeared during this period, seeking about for a so- 
cial philosophy, were for a while guided by the writ- 
ings of Schulze-Delitzsch, and so were delayed for 
a decade or more by an unnatural partnership with his 
middle-class organizations. 

The chief result of this energetic leader's labors 
were credit unions; cooperative groups of small 
tradesmen who financed in this way just the shops the 
consumers' societies were opposed to. Almost every 
writer on cooperation has included them as legitimate 
members of the great cooperative family. To-day 
they are repudiated by the Socialists, but many co- 
operators are not so discriminating. Later these 
tradesmen's banks organized a great nation-wide co- 
operative union, supposed to include all forms of co- 
operative enterprise, the General Cooperative Union, 
within whose limits a number of consumers' societies 
still slumber. At one time this general union included 
all the consumers' societies in Germany, but in 1902 
the Socialists among the latter awakened their less 
idealistic comrades, and the stores began to utter 
radical ideas. Whereupon, at a general congress, a 
resolution was passed expelling the radical consumers' 
groups. This high-handed procedure resulted in a 
general split; with the expelled consumers' societies 
went the great majority of all affiliated with the union, 
including the wholesale society which they had estab- 
lished in Hamburg. The latter then founded a union 
of their own, the Central Cooperative Union, corre- 
sponding to the British Cooperative Union, but by far 
more radical in tendency, being, as it was, itself the 
result of a revolution within the movement. Yet its 
attitude toward British cooperation may be judged 
from the following phrase in a recent historical sketch 



6o consumers' cooperation 

of the German Wholesale Society; " das immer Herr- 
licher sich erfiillen moge der Traum der Weber von 
Rochdale." 

In Italy consumers' societies were founded even 
before national unity had been attained, notably up in 
the northern provinces. By 1886 there were enough 
of them, based on the " sistema de Rochdale," to form 
a national union comprising 68 societies. By 1890 
this number had dwindled to 24, but in 1893 there were 
50; then, each year successively, the membership of 
this federation increased to 103, 131, 279, 398, un- 
til 1898, when they numbered 480. In that year 
there was a revolutionary disturbance in Milan, the 
center of the League, and many persons were arrested 
and imprisoned, among them the secretary of the 
League and many other cooperative leaders. All popu- 
lar societies with a radical tendency were suppressed, 
among them many of the cooperative societies, so 
that in 1899 there were only 300 members in the 
League. By 1901 the number was greater than ever; 
586, and ever since there has been a continuous in- 
crease, the number being 1,933 i^ 19 10. During this 
period these societies had held no less than nineteen 
national conventions, or congresses. Incidentally, it 
may be mentioned that one of the most energetic fig- 
ures in promoting cooperation in Italy has been that 
prominent statesman, one time Prime Minister of Italy, 
Luigi Luzzatti, whom we shall have occasion to men- 
tion again. 

Considering the fact that Russia now stands as the 
leading cooperative nation, in the sense that all its 
radical and progressive political parties, with the ex- 
ception of the Bolsheviki, who insist on a combination 
of state ownership and syndicalism, have officially com- 
mitted themselves to its principles as the basis on which 



COOPERATION SPREADS ABROAD 6l 

the economic future of the nation is to rest, there is 
nothing out of the ordinary in the early history of 
the Russian movement to relate. Consumers' socie- 
ties were organized before the earliest agitations of 
the Nihilists in the beginning of the sixties. The so- 
ciety in Riga, established in 1865, is supposed to have 
been the first. A society which was founded the fol- 
lowing year, in Perm, is still prospering. In 1872 
the English Wholesale was receiving regular orders 
for goods from a society in Kharkov, southern Russia, 
which thus exercised its right as a cooperative society 
to purchase from an institution limiting its sales en- 
tirely to such customers. Nevertheless, there was not 
much progress in Russia during the following years. 
The government placed every possible obstacle in 
the way of their development, short of actual sup- 
pression. So many were the formalities which had to 
be observed in obtaining legal status that it must have 
been a very determined group of consumers which per- 
sisted to the point of attaining it. It was not until 
after the revolutionary disturbances of 1905, when all 
other radical movements had been so severely sup- 
pressed, that consumers' societies made much head- 
way. By that time, too, the government showed less 
opposition, perhaps going on the theory that if the 
social unrest were diverted into these economic chan- 
nels the people would have less time or energy for 
more violent manifestations of the revolutionary 
spirit. 

In some countries, peculiarly enough, where condi- 
tions w^ould have seemed to have warranted an early 
movement, there was practically no cooperative activ- 
ity until within the past few years. Finland, now cov- 
ered with a network of cooperative organizations, with 
one of the most prosperous wholesale societies, showed 



62 consumers' cooperation 

not a sign before the beginning of the century. In 
spite of the fact that Denmark made such an early be- 
ginning, Sweden and Norway showed no interest in 
cooperation until well after the beginning of the cen- 
tury, the Swedish wholesale society being founded 
in 1904 and the Norwegian in 1907. 

At the present time the only countries in Europe 
where Consumers' Cooperation is not firmly estab- 
lished are Turkey, Greece, Montenegro, Serbia, 
Rumania, and Portugal. On the other hand, quite 
a movement has been established in Japan, and some 
few societies are heard from in Australia and in 
South Africa. 

The test of a really established movement, undoubt- 
edly, is the existence of a federation. A wholesale so- 
ciety, once founded on a democratic, representative 
basis, never fails. The following list of national 
wholesale societies, placed in the order of their ap- 
pearance, will give some indication of the path co- 
operative development has taken in its international 
course. 

Manchester, England 1864 

Glasgow, Scotland 1868 

Copenhagen, Denmark 1884 

Rotterdam, Holland 1890 

Basel, Switzerland 1892 

Hamburg, Germany 1894 

Budapest, Hungary 1899 

Antwerp, Belgium 1899 

Paris, France 1900 

Moscow, Russia 1901 

Stockholm, Sweden 1904 

Helsingfors, Finland 1905 

Vienna, Austria 1905 

Christiania, Norway 1907 



CHAPTER VII 

THE INTERNATIONAL 

It is only a little over twenty-five years since the Co- 
operative Movement assumed an international aspect 
in its organization, nor can it be said that this phase 
of its development has as yet progressed very far, in 
a material sense, at least. Nevertheless, it is through 
this central body, the International Cooperative Al- 
liance, that the general spirit of the movement, as 
a world force, may best be studied. What are the 
principles and the social aims to which all the na- 
tional movements agree in common? This only the 
International can tell us. 

We already know the physical structure of the units 
composing the movement : the local-store societies, or 
distributing centers; their business federations, com- 
monly called wholesale societies, through which the 
local societies have extended their control of distribu- 
tion to the furthermost point and, in some cases, have 
established original sources of supply of their own; 
and, finally, the educational, or propaganda, federa- 
tions, through which principles and modes of prac- 
tice are formulated and agitation is carried on for the 
extejision.of the movement. 

The^e is- nothing in a great economic movement, 
such as the cooperative societies, to confine it to na- 
tional boundaries. One of the essential features of 
the movement as a whole is the community of inter- 
est, not only between the individuals, or between the 
local societies, but between the organizations in the 



64 consumers' cooperation 

various countries. Each society, however local, seeks 
nothing which is not also desired by every other so- 
ciety, at home and abroad. 

This community of interest, naturally, made itself 
manifest first within the boundaries of each national- 
ity, on account of common languages and proximity. 
But finally these lines were also crossed, and repre- 
sentatives of the various national organizations came 
together to see wherein they could unite their strength 
and activity for whatever purposes they might have 
in common. 

The progress of this tendency has been outlined in 
a most masterly manner by Dr. Hans Miiller in his 
" Historical Development of the International Co- 
operative Movement," published in the First Yearbook 
of the International Cooperative Alliance, in 1910. 
To this article I am indebted for practically all the 
facts contained in this chapter. 

The credit for the first initiative toward establishing 
international relations between Cooperators belongs 
to a Frenchman, E. de Boyve, the leading spirit of 
a pioneer group in Nimes, which also founded the co- 
operative union of the French societies, in 1885. But 
already before that he had made the acquaintance of 
Vansittart Neale, through the correspondence he 
opened up with the British Cooperative Union, in 
his effort to secure information regarding the funda- 
mental principles and the methods practiced by the 
British societies. When he called the conference of 
the French societies in Paris, which led to the organ- 
ization of the French federation, the British Coopera- 
tive Union was invited to send fraternal delegates, 
and Neale was one of these. In return the British 
invited the French to send delegates to their na- 
tional congress the following year, and De Boyve ap- 



THE INTERNATIONAL 65 

peared. It was on this occasion that he dehvered a 
speech, in English, proposing an international federa- 
tion, an International Cooperative Union, which should 
act as a center of propaganda for the whole of Eu- 
rope, or the whole world. In fact, it should " cor- 
respond with all the cooperative centers in Europe, 
Australia, and America, to induce them to adopt the 
high principles of cooperation by intervening in all 
conflicts between Capital and Labor." Apparently 
it should also be a sort of an international board of 
arbitration in labor disputes. 

As representative of the spirit possessing the lead- 
ers of that time, it is worth while quoting a few of 
the speeches made on this occasion. 

*' Do you not hear the cries of hatred breathed 
forth," said De Boyve, " in all parts of the world 
against their employers by certain employees, some- 
times, alas, excited by agitators whose only impulse 
is hatred, whose only aim is the destruction of all that 
existed, in the hope that something may spring out 
of the ruins . . . Folly on the one side, selfishness 
on the other. Can we behold with indifference our 
brother workmen carried away by the sway of pas- 
sion without telling them that the means they use 
are keeping them from the end they desire to reach, 
while pacific means would lead them to it? On the 
other hand, is it not our duty to induce the employ- 
ers to enter as much as possible on the path of con- 
cession and give their workingmen an equitable share 
in their profits? " 

In the course of a speech made in reply, one of the 
British leaders said : 

" Years ago we heard something of the * Interna- 
tional,' which alarmed certain people, and we desired to 
lay the foundation of a wiser and more peaceful in- 



(i6 consumers' cooperation 

ternational, which would not indulge in folly and 
selfishness." 

Certainly the Christian Socialists of that period 
must not be confused with the Socialists of Karl 
Marx. As we shall presently see, their whole atti- 
tude was one of compromise with existing condi- 
tions, in spite of the vigor with which they attacked 
the evils of capitalism. 

For the next few years the proposal to unite the co- 
operative movements of the various countries was the 
subject of discussion at the national congresses of 
Great Britain, France, and England. The Schulze- 
Delitzsch societies in Germany refused to consider the 
matter, preferring to wait until a beginning had been 
made and its character assured. 

The British societies, however, were the only ones 
in a position to give financial support to this impor- 
tant project, and they, through the Cooperative Union, 
seemed strongly disposed to do so. It was, as a mat- 
ter of fact, the Christian Socialists themselves, with 
Neale at their head, who discouraged immediate ac- 
tion. 

This was their reason : 

As will be remembered, they stood for a definite 
theory in cooperative production. The Wholesale 
Society had refused to accept this theory. Turning 
to the Cooperative Union, they had there been more 
warmly received ; the yearly congress had expressed a 
rather mild approval of their theories. But there had 
been no concrete result. The Wholesale was even 
then, in the middle eighties, planning further produc- 
tive enterprises, based on the owmership and control 
by the consumers. Once for all they must check this 
tendency; the British cooperative movement, from 
top to bottom, must be pledged to their theory, defi- 



THE INTERNATIONAL 67 

nttely, before the International was organized. For 
their idea must be embodied in the International, and 
for many years to come the British movement would 
have moral control of the International. 

So they again endeavored to have a resolution passed 
at a cooperative congress which should plainly in- 
struct the Wholesale to change its plans for the future. 
Hughes presented the resolution to this effect at the 
congress, held in Dewsbury, in 1888, and the Chris- 
tian Socialists backed it with all their forces. 

But by this time the advocates of the consumers' sys- 
tem of production had begun to evolve a moral justi- 
fication for their system; that the social body, repre- 
sented by the people as consumers, had the right to ex- 
ercise absolute control over the productive plants which 
supplied them their own needs; that the workers in 
these plants were really in the service of the social 
body of which they were themselves also members and, 
as such, had as much control over working condi- 
tions as they were entitled to. They were beginning to 
sense the philosophy of the greater collectivism: the 
collectivism of the people as a whole, represented by 
the consumers' cooperative society, with its member- 
ship open to all the world, on an equal basis, as against 
the narrower collectivism, represented by the small, 
exclusive group of workers. 

For two days a furious debate was carried on over 
Hughes' resolution, and at one time a split seemed 
unavoidable. Finally, however, a compromise resolu- 
tion was offered and passed, " suggesting " and *' ad- 
vising " that the Christian Socialist theories be prac- 
ticed where possible, but so vaguely were these theories 
themselves defined that local societies were invited to 
fill in details. 

The total result was nothing more than a defeat for 



68 consumers' cooperation 

the Christian SociaHsts in their own stronghold, so 
glossed over as to save them from humiliation. 

As undaunted as ever, Neale and his associates now 
began planning new tactics. 

Their plan now was nothing less than to organize 
an International in which the British Cooperative 
Union should have no part, no influence; develop it, 
however slowly, dedicate it to their ideas, then use it 
as a club with which to beat the British movement into 
line, a moral force which should compel the Whole- 
sale to turn its manufacturing plants over to the em- 
ployees, in part, at least. 

" Our international alliance makes little progress 
and leads to nothing," Neale wrote to De Boyve, in 
1892, after having resigned as general secretary of the 
Cooperative Union, '' and it cannot be otherwise so 
long as it more or less depends on the English Whole- 
sale, out of which I can get nothing and which con- 
tinues to oppose the adoption of the principle of la- 
bor's participation in the profits. Having, therefore, 
nothing to set against the revolutionary Utopias, we 
cannot effectively combat them. It is, therefore, im- 
perative that we should make our international co- 
operative alliance completely independent." 

Thus shortly afterward a meeting of individuals fa- 
voring this plan was held in Rochdale, and a manifesto 
was issued, again enunciating the principle of the self- 
governing workshop. 

" At the same time," added the manifesto, " it is 
clear that the spread of a disposition among the present 
employers to introduce into their establishments the 
system of the participation of the workers in profits 
would tend to the growth of this happier system with 
a rapidity for which it would be hopeless to look for 
in any alliance of workmen's productive societies stand- 



THE INTERNATIONAL 69 

Ing alone, however successful their progress. . . . For 
this reason we propose that the alliance, of which we 
invite the formation, shall not be confined to cooper- 
ative societies and organizations and their members, 
but shall include all firms or companies which accept 
the principle of the participation of the workers in 
profit as part of their constitution or systematic prac- 
tice. . . ." 

Thus, partially, at least, and perhaps not quite con- 
sciously, they admitted the failure of their productive 
societies. Now they called to the leaders of capitalist 
industry to support them. 

A large number of individuals responded, among 
them a few representatives of private enterprise. It 
is notable that among them was Tom Mann, later so 
prominently identified with the Syndicalist movement 
in Great Britain. 

Later in the year a more general meeting was held 
in London, two representatives of the French produc- 
tive societies being present. Here they formulated a 
general program for the proposed international alli- 
ance in which, as Dr. Miiller points out, the word " co- 
operation " did not appear once. 

" In the eyes of these men," adds Dr. Miiller, '^ a 
capitalist enterprise which gave its workers a share 
in the profits stood cooperatively higher than the co- 
operative factories of the English Wholesale Society. 
The latter was a horror to them; the former the lofty 
object of their admiration." 

At about this time Vansittart Neale died, and the 
leadership of this movement fell to Henry Wolff, an 
Englishman who had lived for many years in Germany 
and was interested in agricultural cooperation and the 
Schulze-Delitzsch banks, but who understood nothing 
of the consumers' movement. Neale, Holyoake, and 



70 CONSUMERS COOPERATION 

a few others had insisted that profit sharing should be 
the mark of approval for entrance into the alliance. 
Wolff, with his knowledge of German organizations, 
realized that this meant the exclusion of everything 
in that country. From this point of view even the 
program of the Christian Socialists seemed absurdly 
narrow. His influence led to the door being opened 
to any person or organization calling himself or itself 
'' cooperative." Furthermore, the Cooperative Union 
was now invited to send delegates to the meetings. 

But the Cooperative Union, naturally, refused to 
participate with a committee of private persons in 
organizing a federation in which their delegates might 
be outvoted by the managers of a gas company or any 
other private enterprise which chose to call their Christ- 
mas presents to their employees '' profit sharing." 
For a while the organizers tried to go on without the 
Union. 

But this attitude on the part of the organized con- 
sumers of Great Britain had its influence on the Conti- 
nent. Individuals in plenty came forward, eager to 
join what promised to be a lively debating society, but 
the cooperative societies showed no such inclination. 

Finally the conditions of the Cooperative Union 
were agreed to. These were that the Union's dele- 
gates should constitute the sole representatives of the 
British cooperative movement in the federation. The 
Union also demanded equal participation in the prepa- 
rations for convening the first congress. 

On August 19, 1895, the first congress of the Inter- 
national Cooperative Alliance was convened in London, 
under the chairmanship of Earl Grey, later Governor- 
General of Canada and until his recent death honorary 
president of the Alliance. 

The official participation and support of the British 



THE INTERNATIONAL 7 1 

Cooperative Union had not been without result, for 
French, ItaHan, Belgian, Dutch, Swiss, and Danish 
societies sent delegates. The German societies still 
held aloof. But there was a rather conspicuous ab- 
sence of consumers' societies. Among the numerous 
private individuals present was the Irishman whose 
name has since become so prominently connected with 
Irish reform, especially in agriculture, Mr. (now Sir) 
Horace Plunkett. Luzzatti, the Italian statesman, 
was also present and was elected a member of the per- 
manent committee. 

During the first two days of the gathering the pro- 
ceedings ran smoothly enough, but on the third day 
came the business of passing resolutions on fundamen- 
tal principles which should serve as a guide in drafting 
a constitution. 

Already four resolutions had been passed favoring 
profit sharing. And now the old irreconcilable ele- 
ment, with Holyoake at their head, demanded that it 
be made a condition of membership. Immediately the 
meeting burst forth into wild debate. For a moment 
collapse seemed unavoidable. But here some of Hol- 
yoake's own associates, less fanatical than himself, 
realizing that without the moral support of the Union 
and, finally, the financial support of the Wholesale, 
there would be no international federation, went 
against him, and he lost his point. Neither profit 
sharing nor any other device was made a condition 
of membership. 

Far better would it have been if this issue had been 
fought out to the bitter end and a split had been the 
result. In a spirit of compromise no principles at all 
were laid down and any person or organization might 
join, to retard the progress of the movement by in- 
ternal dissension for another ten years to come, cloud- 



72 CONSUMERS COOPERATION 

ing an intelligent understanding of the true basis of 
the genuine cooperative movement. To this day 
Holyoake, then the chief and the most persistent of 
this group of muddled reformers, is still regarded as 
the historian and the greatest authority on co5pera- 
tion, which, in fact, he never understood. His writ- 
ings, recommended to students of the subject, can 
have no other result but to misguide and to con- 
fuse. 

" On this cardinal point of cooperative doctrine," 
comments Dr. Miiller, in summing up the results of 
this first congress, '' the schism remained permanently 
defined; in fact, through the International Alliance 
it became a problem for the whole cooperative move- 
ment. It lay in the nature of the matter that it could 
not long march under one banner which, as Holyoake 
aptly remarked, bore on either side a different device. 
If the standard set up in London were regarded from 
the left, one read ' cooperation ' ; if from the right, the 
word ' profit sharing ' was visible." 

This was, unfortunately, true. The International 
Cooperative Alliance, born amid the mental chaos of 
its organizers, must now devote its energy to straight- 
ening its own crooked back. Had it been able to start 
clear, with a well-defined program, a clear understand- 
ing of the principles and aims of cooperation, it might 
have turned its forces toward spreading and deepening 
the international movement. On the other hand, it 
may also be said that the struggle which followed 
made all the clearer the principles which have since 
been enunciated; that they stand forth as the result of 
the experience of the movement, rather than as the 
formulated theories of any man, or set of men. In 
fact, it may be said that what now may be defined as 



THE INTERNATIONAL 73 

true cooperative practice and theory has been accepted 
by Cooperators in spite of themselves. 

The International Cooperative Alliance was begun 
under the auspices of conservative reformers. To-day 
it stands forth as intrinsically the most revolutionary 
organization in the world. How this transition was 
gradually accomplished will be shown in the next chap 
ter. 



CHAPTER VIII 

EVOLUTION OF THE INTERNATIONAL COOPERATIVE 
ALLIANCE 

As before remarked, the history of the International 
Cooperative Alliance is simply a record of a virile, 
rapidly developing movement gradually disentangling 
itself from a maze of false doctrines, in which its 
founders had attempted to enshroud it. Had they 
been able they would have fastened an orthodoxy 
on the organization as tyrannical as that of any 
church. 

The next few congresses following the first need 
not be described in detail ; there is a simiilarity between 
them in their very madness. The Owenites at their 
very wildest moments never proposed schemes more 
absurd than were those seriously considered at the 
first few international congresses and some of which 
had already been adopted by national conferences. 
As an illustration: at the second congress of the Alli- 
ance, held in Paris, in 1896, two of the most prominent 
leaders of the French movement endeavored to have 
engrafted in the constitution a formula by which the 
profits of all cooperative enterprises must be divided, 
rather resembling a recipe for some chemical con- 
coction. Thus, the net profits were to be divided 
equally in five parts : one part should go to talent, one 
to capital, one to labor, one to insurance, and one to 
a reserve fund. 

At this gathering another element made its first ap- 

74 



INTERNATIONAL COOPERATIVE ALLIANCE 75 

pearance: the agricultural selling societies, the chief 
exponent of which is to-day Sir Horace Plunkett. 
Wolff, who represented this element then, read a paper 
before the congress on agricultural societies in which 
he made it plain that he considered the consumers' 
societies the logical market for the products of the 
agricultural societies; that it was the duty of the 
former to patronize the latter, as it had been their 
duty to patronize the self-governing workshops. 

Little need be said about the rules, or constitution, 
which were adopted at this second congress ; they were 
not made binding. No set of rules could have been 
framed which could have been accepted as binding by 
so heterogeneous a collection of elements. 

An imposing central committee was elected at this 
Paris congress, on which was represented practically 
every country of the world, including the United 
States. The American representative was probably 
typical of a good many others; he was ^ N. O. Nelson, 
a private manufacturer of the Middle West who had 
instituted profit sharing among his employees, but who 
was not then, nor has he been since, connected with 
any democratic, spontaneous cooperative society. 

In the following year, 1897, the third international 
congress was held at Delft, Holland. It was practi- 
cally a repetition of the Paris congress ; the academic 
and often irrelevant speeches made here were most of 

1 In reading over the proofs it strikes me that the above refer- 
ence to Mr. N, O: Nelson does him an injustice. He has de- 
voted a large part of his life and all of his personal fortune to 
propagating the Cooperative idea in this country. Some years 
ago he established, at his own expense, a chain of stores in and 
around New Orleans, about which he hoped to develop a co- 
operative membership. Upton Sinclair says that this enterprise 
ruined him financially. It was magnificent idealism — ^but not 
cooperation. To cooperate one must work together with his 
fellows. A. S. 



y6 consumers' cooperation 

them uttered by private individuals who represented 
nothing but their own opinions. 

Then came a period of three years in which no con- 
gress was held ; the fourth congress convened in Paris, 
in 1900. 

But during this interval important developments 
were taking place in the cooperative world. The Eng- 
lish Wholesale Society had invited the German Whole- 
sale Society to send a delegation over to Manchester 
to inspect its plants. The Germans came — and were 
astounded. Then came similar visiting delegations 
from Denmark, Austria, Belgium, and other countries. 
In 1900 Dr. Hans Miiller was sent by the Swiss Co- 
operative Union on a six weeks' tour of inspection of 
the British cooperative movement, with the result that 
he became an ardent champion of the consumers and 
was one of the first to help deduce the working 
theories on which the modern movement is based. 
During this period, also, the two British wholesale 
societies, the English and the Scottish, together with 
the German Wholesale, became members of the Al- 
liance. The Swiss Union also joined in a body. 

Meanwhile a radical change had taken place in the 
attitude of the political Socialists toward cooperation. 
Lasalle had predicted that the cooperative societies 
would never acquire any social significance. But he 
was now being contradicted by actual facts. The tre- 
mendous growth and financial strength of the English 
Wholesale Society, calmly reporting losses or gains of 
millions of pounds sterling in its quarterly balance 
sheets, impressed the Socialists. They became inter- 
ested. Nor was this first interest quite a brotherly, 
or a sympathetic, interest, perhaps. They would like 
to annex those fat surpluses. Or, if they could not 



INTERNATIONAL COOPERATIVE ALLIANCE J^J 

be expropriated, they would like to acquire such sur- 
pluses through similar means. Thus they discovered 
an affinity between political Socialism and cooperation 
to which, fortunately, the Cooperators were blind. 

But this selfish stage passed ; has passed, now. In- 
dividual Socialists began entering the movement, but 
if their motives may not have been purely for cooper- 
ation in the beginning, they eventually became so. 
Most of them began to realize that here was the real 
economic revolution of which their leaders talked so 
much. 

Thus there were two distinct consumers' movements 
in France during the latter part of the nineties; one 
represented by the pure and simple Cooperators, in- 
terested either for material benefits or because they 
believed cooperation alone would achieve a solution of 
the social problems; and the Socialist consumers' so- 
cieties, whose members either thought this a good 
method by which money could be raised for the treas- 
ury of the political party, or who believed political 
action not sufficient in itself. Both elements joined 
the Alliance. Thus the original founders of the or- 
ganization, who had denounced the '' revolutionary " 
Marxians, were now obliged to receive them within the 
fold and consort with them. And they continued 
coming in, in ever greater numbers, doing their share 
toward the evolutionary changes which were taking 
place within, never hesitating to make themselves and 
their theories of the " class struggle " heard. It was 
in their contact with this Socialist element that the 
consumers began acquiring a social consciousness of 
their own. 

Not least important was the publication of Beatrice 
Potter's (Mrs. Sidney Webb) widely read ''Co- 



78 consumers' cooperation 

operative Movement in Great Britain," wherein she 
literally tore to shreds the theories of Neale, Hughes, 
and Holyoake. 

All these influences together began making them- 
selves felt in the congress of 1900. 

There it was that J. C. Gray, Neale's successor as 
general secretar}- of the Cooperative Union, presented 
a motion for the abolition of individual membership, 
except in the case of such countries as had not yet de- 
veloped a democratic cooperative movement. Hol- 
yoake fought this move, for by making the Alliance 
a representative body such as he would be little heard. 
He realized that once the organization was put on a 
representative basis, profit sharing, which had been 
hitherto championed almost exclusively by gentlemen 
of the upper classes, and not by delegates of organiza- 
tions, would be relegated to oblivion. 

Gray's motion was carried and the Alliance became 
at least a representative body, if not entirely repre- 
sentative of cooperation. And, as Holyoake rightly 
feared, no more was ever heard of profit sharing at the 
International Alliance congresses. 

The fifth congress, in 1902, was held in Manchester, 
and this was another significant event. Here every 
delegate from abroad might see with his own eyes 
what the consumers' organization had accomplished. 
By this time some of the English Wholesale's plants 
ranked as the biggest of their kind in the kingdom, 
even in the whole world. After this congress began 
appearing a great number of pamxphlets, written by Co- 
operators of Continental countries, in which the won- 
ders of the A\^holesale Society were described and 
praised. Not the least enthusiastic were the one is- 
sued by the Socialist-Cooperative delegate from Bel- 
gium, Victor Serwy, and the book published by Hein- 



- INTERNATIONAL COOPERATIVE ALLIANCE 79 

rich Kauffman, director of the German Wholesale. 
All this was strong propaganda material, good adver- 
tising, from the consumers' point of view. Facts, and 
not theories, it must be pointed out, were presented. 
People were impressed by the concrete results of the 
consumers' activities, as against the mere reams of 
printed matter, the results of the activities of the 
theorists. As yet there was no conscious revolution- 
ary spirit, no realization that the old order must go to 
give place to the new. That spark was soon to be ig- 
nited, but the full flame has only just lately been 
burning. 

As a result of the democratization of the rules the 
Alliance saw its one hundred and twenty individual 
members reduced to ten. But on the other hand one 
hundred and twenty new organizations joined. 

The sixth congress was convened at Budapest, in 
1904, and in spite of the distance from the cooperative 
centers in western Europe, the attendance was the 
largest which had yet been attained. Great Britain, 
France, Germany, and Italy were as well represented 
as ever, while Switzerland, Denmark, Holland, Bel- 
gium, Austria, and even the Balkan states sent strong 
contingents. Altogether there were about two hun- 
dred and 'fifty delegates representing actual organiza- 
tions in fourteen countries, though the majority of 
these were from the Hungarian societies. For the 
first time the congress of the Alliance had taken on a 
really international and representative character. The 
assembly did represent what was then considered the 
cooperative movement of the world. 

There was nothing on the congress agenda of a 
controversial nature, nothing seemed to indicate any- 
thing but a harmonious series of sessions in which, 
for the first time, principles of a constructive charac- 



8o consumers' cooperation 

ter might be enunciated, if not adopted. Nevertheless, 
it must be remembered that in spite of the large influx 
of consumers' societies there were still m.any conflict- 
ing elements in the membership. There were the 
Schulze-Delitzsch banking societies and the Reiffeisen 
credit unions of Germany and Austria, the productive 
societies of England and France, and the numerous 
agricultural sales societies from all over Europe. 

The cause of the explosion which was nearly to dis- 
rupt the Alliance was Dr. Hans Miiller, who was then 
secretary of the Swiss Union of Distributive Societies. 
He was scheduled to read a paper on '' The Organiza- 
tion of Distributive Societies in Rural and Semi-rural 
Districts." After describing the consumers' cooper- 
ative stores in the villages and small towns of Switzer- 
land, he began to make a few extemporaneous elabora- 
tions of his point of view, wherein he gave his idea of 
a comprehensive and consistent policy for the develop- 
ment of the movement. He emphasized the necessity 
of arousing a consciousness of solidarity among the 
working classes as consumers and of impressing them 
with a realization that the object of cooperation was 
something rnore than the cheapening of the cost of liv- 
ing: that it was the elimination altogether of private 
profit, that its mission was to do away with economic 
tribute, which pressed so heavily on the mass of the 
population under the present system. " Finally," he 
concluded, " cooperation is an economic and social 
movement for liberty which, by means of the organized 
■building up of a new order of the economic and social 
conditions on which our existence depends, aims at ob- 
taining, both for the individual and the people at large, 
a greater amount of independence. Therefore, who- 
ever sincerely desires to promote the cooperative move- 
ment in any respect whatever must never forget to 



INTERNATIONAL COOPERATIVE ALLIANCE 8 1 

banish the old state of dependency and to be most care- 
ful never to replace it by any similar institution." 

Surely no Socialist agitator, which Dr. Miiller cer- 
tainly was not, ever uttered words more fundamentally 
revolutionary than the calm, carefully thought out 
statement of this program. 

Naturally, the Socialists present were in high glee, 
and started the applause. There came a pause, as 
though the majority of the assemblage were thinking 
over the words of the speaker. And then, finally, the 
inevitable opposition flamed forth. 

Dr. H. Criiger, representing the German Union of 
Schulze-Delitzsch societies, sprang to his feet and said 
~ just what might have been expected of him. 

'' I must beg to be allowed to state," he cried, '' on 
behalf of the distributive societies of the General Co- 
operative Union in Germany, with which I am con- 
nected, that they do not by any means subscribe to the 
principles set up that the task and object of cooperation 
is to organize consumers wholesale in avowed oppo- 
sition to what is called the capitalist trading system 
now established. . . . We do not look upon the dis- 
tributive societies as a means of replacing the existing 
order of things. . . . Cooperation has a large number 
of opponents arrayed against it as it is, and we can 
hardly hold it to be expedient gratuitously still more 
to increase the number of its foes by the adoption of 
'SO visionary a program as in my opinion is that sug- 
gested. . . . Our desire is that cooperation should 
take its proper place in national trade." 

These remarks were quickly supported by the dele- 
gate from the German Reiffeisen credit unions. The 
middle classes must be maintained, he said. 

" And accordingly," he added, "we avoid carrying 
cooperative practices to extreme lengths by discourage 



^2 CONSUMERS^ COOPERATION 

ing the formation of societies which must almost neces- 
sarily prejudice the interests of the middle class and 
possibly extinguish it altogether, at any rate, until we 
are compelled to do so by necessity. Thus we only 
act in the true spirit of Reiffeisen cooperation, for in 
our organization we stand committed to the exercise of 
public spirit in the sense of Christian love of our neigh- 
bors." 

Then came the turn of those who supported Dr. 
Miiller: Mrs. Steinbach, representing the Hamburg 
organization, Helies, representing French consumers' 
societies, and, finally, most significant of all, J. C. 
Gray, general secretary of the British Cooperative 
Union, who declared there must be no limit set to the 
expansion of consumers' cooperation, whatever the 
result m.lght be to existing trade interests. 

In replying to his critics. Dr. Miiller again elab- 
orated his theme, pointing out that Consumers' Co- 
operation was diametrically opposed to private-trading 
enterprises; that it was by nature anti-capitalistic. 
This was, indeed, the point he emphasized; that co- 
operation was essentially revolutionary, whose aim 
was the destruction of the present industrial system, 
not by violence, but by a general replacement with co- 
operative enterprise. 

As Dr. Criiger later wrote in the official organ of 
his organization, the debate closed with a " victory for 
the advocates of cooperative Socialism." 

This time there was a split in the Alliance. The 
great majority of the agricultural societies withdrew, 
though they had also the reason that a resolution was 
passed by the assemblage deprecating state aid in co- 
operative enterprise, which they, like all farmers' or- 
ganizations, sought assiduously. Three years later 
they formed an international alHance of their own. 



INTERNATIONAL COOPERATIVE ALLIANCE 83 

The German Schulze-Delitzsch societies, naturally, also 
withdrew. All the conservative elements, in fact, hur- 
ried to get out of such revolutionary company. 

At first it seemed that the split was to have serious 
results; the Schulze-Delitzsch societies alone, in Aus- 
tria and Germany, numbered twenty-three. 

But the gap which these secessions made was more 
than filled by the new societies which came in, most 
of them consumers' organizations which had held aloof 
on account of the conservative character of the Alli- 
ance. As compared to the two hundred and fifty dele- 
gates at Budapest, there were nearly four hundred at 
the next congress, held in Cremona, three years later. 
To show the large influx of Socialist-Cooperators 
which had taken place, it is worth mentioning that at 
this congress, in 1907, there was a decided effort made 
to pass a resolution declaring for the '' class struggle," 
etc., but this was decidedly defeated. The Alliance 
was not going to have its revolutionary character fixed 
for it by any school of theorists. 

Luzzatti was in the chair at the time this effort 
was made. 

" If you wish your societies to enter our AlHance,'* 
he 'said to one of the Socialists, '' we will throw the 
doors wide open to receive you, but if you wish to 
compel us to abandon our principles and pay a fright- 
ened homage to yours, you would despise us and we 
would despise ourselves for so doing. . . . Hitherto 
your masters, the Socialists, have fought cooperation. 
What contempt the leaders of Socialism displayed for 
cooperation! Our leaders withstood the attack, de- 
claring that they were convinced that cooperation sup- 
plied a practical formula for the solution of the social 
question and the questions affecting the working 
classes. To-day Socialism has made peace with co- 



84 consumers' cooperation 

operation, and it is lending to it the impulse of youth- 
ful energies of which I am in no wise afraid." 

It was at this same meeting that Dr. Miiller offered 
a resolution suggesting that an International Whole- 
sale Society be formed. Those who were present say 
Luzzatti paused, his eyes lighted up ; then, dramatically 
raising his hand, he said : 

'' Dr. Miiller proposes to the assembly a great idea ; 
that of opposing to the great trusts, the Rockefellers 
of the world, a world-wide cooperative alliance which 
shall become so powerful as to crush the trusts." 

This end, voiced by one of the conservative leaders 
of the international cooperative movement, could 
surely not be stated in more definite terms. No less 
significant and definite were the words with which 
Earl Grey who, it will be remembered, opened the first 
congress, in London, opened the ninth congress of the 
Alliance, in Glasgow, in August, 191 3 : 

'' And now we meet in our ninth congress, fortified 
and encouraged by our past experience and conscious 
that it is in our power, if we are only sufficiently in 
earnest, to secure the triumphant realization of a future 
international cooperative commonwealth which we 
believe will one day be coequal and coextensive with 
the whole civilized world. The remarkable growth 
of the cooperative movement in Germany, Great 
Britain, Denmark, Finland, Ireland, and elsewhere, 
since the day when we laid the foundation stone 
of this great alliance, justifies our confident expecta- 
tion that the day of a new social order is at hand." 

Such was the spirit which animated the movement 
before the recent great war. What has happened in 
the movement since then, in a material sense, has had 
a tremendous influence in strengthening that spirit, not 
only among leaders, but throughout the rank and file. 



CHAPTER IX 

GROWTH 

The real advance of the cooperative movement began 
in the sixties, with the federation of the local societies 
into the English Wholesale Society. What had oc- 
curred 'before then, though very important, was really 
nothing more than the mobilization of sufficient forces 
to make a forward move. There were then probably 
less than a hundred thousand local society members 
throughout all of Great Britain, of which less than 
a fifth were willing or able to support the new enter- 
prise. 

We have already described the circumstances under 
which the Wholesale began manufacturing, in the early 
seventies : first biscuits ; then, some months later, boots 
and shoes. Both these ventures were fairly success- 
ful. But cooperative production did not thencefor- 
ward leap ahead with bounds. The agitation of the 
Christian Socialists undoubtedly had something to do 
with this slow development, in that it undermined the 
faith of even some of the Wholesale officials in this 
system of production. But there were other reasons 
as well. 

Each step had to be carefully considered, for the 
movement was pioneering over uncharted regions. 
Outwardly a cooperative industry may present much 
the same features as any private enterprise, but this 
similarity goes no further. 

As the management committee was soon to learn, 
it could not simply hire men who had been trained in 

8s 



86 consumers' cooperation 

private business and set them to work on a salary. In 
the first place, the grade of ability required would have 
demanded larger remuneration than the movement 
could then afford to pay; no ordinary business man 
would pilot a big enterprise through its initial diffi- 
culties with no prospects of big reward. At least, ex- 
perience does not show that it can be done. A co- 
operative enterprise has many difficulties to face in 
the beginning, but they are of a different character 
from those which the private business has to encounter. 
I believe it was Heinrich Kaufmann, director of the 
German Wholesale Society, who said that the only 
training of any value to cooperative industry is that 
which has been acquired in cooperative industry. At 
any rate, one has only to look through the biographical 
index in back of the " History of the C. W. S.," by 
Mr. Redfern, a sort of a '' Who's Who " of the Eng- 
lish movement, to realize that English cooperation has 
trained its own executive talent. On the other hand, 
these men seem likewise unfitted for competitive busi- 
ness. The directing heads of the cooperative enter- 
prises seem never to be tempted to go into business for 
themselves, or to accept employment under private 
masters. Certainly it is not their remuneration which 
holds them loyal to the movement; William Maxwell, 
for over twenty-five years president of the Scottish 
Wholesale, never drew a salary over thirty-eight dol- 
lars a week, and twenty-five dollars a week is a pretty 
high average for the managers of the bigger local en- 
terprises, some of which do a yearly business of many 
millions. Executive talent of this magnitude draws 
its ten and fifteen thousand dollars a year in private 
business. But these men seem never to feel the temp- 
tation. There is, undoubtedly, a stimulus to public, 
or social, service of this sort not unlike the stimulus 



GROWTH 87 

of the stage, which easily takes the place of greed for 
profit. And finally, it would be doubtful whether a 
cooperative executive would be of much use in the pri- 
vate business world. Advertising and salesmanship 
would be unknown arts to him. Perhaps it is as Mrs. 
Webb has suggested : that the high salaries in private 
business are not so much earned by pure executive 
ability and good judgment as by " smartness," the 
ability to steal a march on a rival or to gauge the mar- 
gin of profit a certain market will stand. 

Thus the progress of cooperative manufacturing in 
the beginning was limited by the supply of experienced 
men to direct. John T. W. Mitchell, chairman of the 
management committee from 1874 until 1895, a Roch- 
dale flannel weaver originally, was one of the first. 
Big, bluff, direct, not by any means an orator, not what 
one would call a popular leader, he certainly developed 
rare executive ability and business judgment. His 
successor, John Shillito, rose from a simple hand in a 
carpet factory and showed an equal capacity for guid- 
ing the wheels of million-dollar plants. William Max- 
well, already referred to, was at first a coach builder 
and rose to the head of the Scottish Wholesale through 
his local-management committee. Thus these captains 
of cooperative industry rose silently from the rank 
and file and made good. So it was, too, with the lesser 
heads ; factory superintendents, shipping managers, 
chief clerks, etc. In the early years cooperative enter- 
prise was largely a training school for such men, and 
the actual enterprises could not grow any faster than 
the capacity of the men in charge. Indeed, things did 
not always run smoothly; the losses were heavy in 
those days, and experience had to be paid for, in hard 
cash, as the training of good gunners entails heavy 
bills for ammunition. 



85 CONSUMERS COOPERATION 

The English Wholesale had begun manufacturing 
biscuits for the very practical reason that the demand 
justified it. The Scottish Wholesale, founded in 1868, 
did not begin manufacturing till 1881, and then, to the 
credit of the Scotch be it said, it was sentiment, rather 
than plain business, which decided with which com- 
modity a beginning should be made. Shirt making 
was then one of the worst trades for sweating, and the 
Scottish delegates, reluctant to handle such goods, dis- 
cussed the possibility of improving labor conditions by 
establishing a model shirt factory under union condi- 
tions. Business sense and sentiment came to an agree- 
ment, and presently Scottish Cooperators were able to 
wear shirts made in a factory where the workers got 
a living wage and worked only forty-eight hours a 
week. 

Save for a very small beginning in manufacturing 
soap, made in 1874, the English Wholesale initiated no 
notable ventures in production during the rest of the 
decade. The next striking achievement was to be ac- 
complished by the Scotch. 

In 1885 the delegates to the quarterly meeting of 
the Scottish Wholesale were presented by their man- 
agement committee with a scheme which fairly took 
their breath away: that the society should acquire 
about fifteen acres of land in the outskirts of the city 
of Glasgow, where land was comparatively cheap, and 
there build an industrial center, comprising not only 
factories of all descriptions, but dwellings for the 
workers, schools for their children, gardens, etc. The 
cost was estimated at about four hundred thousand 
dollars, though eventually much more than that was 
spent before a beginning was made. 

To the cooperative world this must have seemed a 
Utopian vision, and yet the '' canny " Scotchmen listen- 



GROWTH 89 

ing to this proposal did not vote it down. Says Wil- 
liam Maxwell, in his " History of Cooperation in Scot- 
land," '' I think I hear to-day the warning of some 
old veterans who, when they had heard all the sugges- 
tions, simply said : ' Ca' canny, ma man ; it's no yer ain 
siller ye're spendin'.' " 

Eventually twelve acres were acquired at Shieldhall, 
at fifteen hundred dollars an acre, and there was 
founded the main productive center of the movement 
in Scotland. 

''Factory followed factory," says Mr. Maxwell; 
'' each new building was fitted with modern machinery. 
. . . Some idea of the rapidity of the development 
may be gathered from the following statement : boots 
and shoes, tanning and currying, artisans' clothing, 
cabinetmaking and preserving, begun in 1890; confec- 
tionery, mantles, tobacco, in 1891 ; coffee essence, 
printing, chemicals, engineering, in 1892; sausages, 
tinware, pickles, and boots and shoes, in 1893." 

By this time, of course, the English had also added 
many new enterprises to their initial efforts. But be- 
fore enumerating these, it may be of interest to note 
how the English Wholesale solved certain problems 
of transportation. 

In the effort to reach out toward original sources of 
supply and to eliminate big middlemen's profits, the 
Society had been establishing purchasing agencies in 
various foreign countries : in New York, for the pur- 
chase of American agricultural produce, such as cheese, 
grain; in Denmark, for the purchase of butter, bacon, 
and eggs; in Greece, for the purchase of dried fruits, 
etc. These agencies gradually developed a large vol- 
ume of trade and made big shipments at a time to 
Manchester, so big that it soon became necessary to 
charter vessels. The next step was to acquire owner- 



90 CONSUMERS COOPERATION 

ship, and in 1876 the steamship Plover was purchased 
as the first of the C. W. S. fleet. 

But — the Wholesale carried freight only one way ; 
it had nothing to export. Empty holds on the return 
passages would mean heavy losses. Here it was found 
necessary to make one of the very few departures from 
what has been a persistent and continuous practice with 
all wholesale societies — never to deal with private 
trade. Thus, when outward bound, the Plover took 
general cargo, engaging in a general freight busi- 
ness. 

This brought the C. W. S. into open competition 
with private transportation companies. 

In 1883 the Wholesale put a steamship into the trade 
between England and Hamburg, on account of its own 
increasing shipments from Germany, and also because 
the private companies were needlessly raising freight 
rates. Immediately the private transportation compa- 
nies began cutting outward freight rates against the 
C. W. S. 

The Wholesale accepted the challenge, at once 
bought another steamer for forty thousand dollars, 
and entered into the rate war. The steamship compa- 
nies had assumed a very dictatorial tone in their cor- 
respondence with the Wholesale, and this had roused 
something like a class feeling on the part of the dele- 
gates to the quarterly meeting who approved the de- 
cision to fight. 

'' A certain big company commands us not to bring 
yeast from Hamburg to Hull on Tuesdays," reported 
the committee. 

'' We'll show these plutocrats we can fight them 
with their own weapons," was the general tenor of 
the discussion. 

The struggle between the private companies and 



GROWTH 91 

the Wholesale continued until 1885, the loss to the 
latter sometimes amounting to five thousand dollars a 
quarter. But the delegates accepted these losses cheer- 
fully; they playfully referred to the shipping depart- 
ment as the " picturesque department." 

Then, finally, there came an offer from the private 
companies to compromise; the agent of the railroad 
company came as mediator. It was the first struggle 
against big capital in which the Wholesale became 
engaged, and, as in subsequent affairs, it came out 
victor. 

The fleet of the Wholesale expanded, but was al- 
ways confined to the Channel trade. The question of 
outward cargoes has, after all, proved the limitation 
to a really extensive fleet of carriers, for there is a 
strong prejudice against the carrying of private 
freights. But recent developments on the Continent 
in cooperative trade, especially in Russia, may soon 
remove this barrier. 

The fate of a great number of the old self-govern- 
ing workshops, which had enjoyed temporary success 
through the support of the consumers' societies, is 
illustrated in the circumstances under which the 
Wholesale began its next big manufacturing venture. 

A self-governing workshop had been founded in 
Batley; it was a woolen mill. The Wholesale bank 
had advanced the owners money. When this establish- 
ment went into bankruptcy, in 1883, the Wholesale 
was the chief creditor, to the extent of thirty-seven 
thousand dollars. Arranging with the other creditors, 
the Wholesale took oyer the plant; then, four years 
later, began operating it. To make the necessary con- 
necting link between the woolen goods turned out by 
this factory and the suit of clothes ready for the pur- 
chasing Cooperator, a tailoring department was estab- 



92 CONSUMERS COOPERATION 

lished, and so the Wholesale began the manufacture of 
clothing. 

It will be remembered that in the very early days 
quite a number of cooperative societies began with 
grinding w^heat into flour, as in the case of the Hull 
society. As the old picturesque water-driven mill 
gave way to steam-driven machinery and milling plants 
became more expensive, such ventures became fewer. 
Invariably, in England and Scotland, at least, societies 
began with foodstuffs. But as they prospered and de- 
veloped, as the Rochdale Society had done, many of 
them took up flour milHng on a modern scale, or a 
number of societies in one district would join together 
for this specific purpose. In fact, this the Rochdale 
Society had done, with several of its neighbors. For 
this reason the Wholesale Society refrained from flour 
milling; it did not wish to compete with its own con- 
stituent members. 

Nothing so well illustrates the tendency in modern 
industry toward centralization as the circumstances 
under which the Wholesale Society was forced to 
change this policy. 

New machinery for flour milling, as in all other 
lines of industry, was constantly being invented, most 
notable being the steel rollers. These modern innova- 
tions were being brought into use, in the United 
States and Hungary, in the form of huge, costly plants. 
With these gigantic enterprises the local consumers' 
societies could not compete, not because the capital 
was lacking, but because such huge plants must neces- 
sarily have a larger output than could be absorbed by 
one locality. Furthermore, these same conditions were 
making it more and more compulsory for mills to be 
near water transportation, on account of the bulky na- 
ture of the material handled. 



GROWTH 93 

As this situation developed it came to be recognized 
that the Wholesale was logically most fitted for an 
enterprise of such broad scope. And so it began tak- 
ing over some of the mills of the local societies, en- 
larging and modernizing them and establishing new 
mills. 

This step was finally approved in the late eighties. 
In 1889 the Wholesale began leisurely to build its first 
big flour mill in Newcastle, at a cost of six hundred 
thousand dollars, when it suddenly became known that 
a flour trust was about to be formed in Great Britain. 
The promoters had, in fact, approached several of the 
local cooperative societies owning mills of their own 
and offered to take them in, apparently densely igno- 
rant of the basis on which they were conducted. Thus 
warned, the Wholesale pushed the building of its big 
mill to completion, and in 189 1 it was inaugurated 
and began grinding flour for English Cooperators. 

For some years this enterprise, one of the biggest 
of its kind in the country, was run at a loss, on account 
of conditions in the wheat market. The deficit finally 
reached the round sum of one hundred thousand dol- 
lars. Eventually the corner was turned and more and 
bigger mills were built. The Chancelot Mill, estab- 
lished in 1909, by the Scottish Wholesale Society, is 
said to be the biggest and best equipped flour mill in 
the world. 

In 1895 the English Wholesale Society opened big 
soap works. 

Which recalls an earlier episode involving soap, ex- 
perienced by the Scottish Wholesale. 

A large soap manufacturer, whose brand, the fa- 
mous " Sunlight," known all over the Continent in 
recent years, was even then in universal demand among 
the working classes, had fixed the retail price of his 



94 CONSUMERS COOPERATION 

product, as manufacturers often do. The Scottish 
Wholesale accepted this condition and it was univer- 
sally adhered to by the local societies. Then some 
private traders, ever watchful where they might in- 
jure their cooperative rivals, pointed out that the quar- 
terly rebates, or '' dividends,'' really amounted to a re- 
duction in price. The Sunlight Company immediately 
took the matter up with the Wholesale and insisted that 
the cooperative societies must not grant rebates on Sun- 
light soap. This was, manifestly, impossible from a 
bookkeeping point of view alone, but the Wholesale So- 
ciety simply made the curt reply that the Sunlight Com- 
pany should not meddle with the Wholesale's internal 
affairs. But Sunlight insisted. 

Whereupon the W^holesale closed its account, ap- 
pealed to all the local societies to do the same and, for 
the time being, procured its soap elsewhere. 

The local societies responded loyally, some of them 
hurling the Sunlight posters into the street. In the co- 
operative world the boycott was pretty general. 
Within a week the Sunlight man reconsidered his pre- 
vious decision and offered to come to tenns. But it 
was then too late. Steps had already been taken to- 
ward opening up cooperative soap works. And this 
was eventually done. 

The English Wholesale soap wofks began with an 
output of seventy-two tons a week, in 1895 ; by 1906 
this had increased to two hundred and sixty-five tons. 
Then, for a while, the increase slackened. 

In that latter year it was suddenly announced that 
twenty soap manufacturers in Great Britain, con- 
trolling a capital of sixty million dollars, had come 
to a " working agreement." 

In that same week in which this announcement was 
made the demand for cooperative soap rose from three 



GROWTH 95 

hundred tons to six hundred and sixty tons. The co- 
operative works put on three shifts, worked its machin- 
ery day and night, and still could not supply the call. 
Extensive enlargements were made as hurriedly as pos- 
sible. Obviously the outside public recognized the co- 
operative movement as an excellent weapon to use in 
" trust busting." 

Private business was highly enraged at this result, 
as may be judged from the following quotation from 
an editorial in the Grocer, a trade journal: 

'' This diversion of the soap trade from ordinary 
channels will be regretted by all interested in the suc- 
cess of private trade . . . the soap manufacturers 
concerned will find it difficult to recover the trade they 
have lost and which the Cooperative Wholesale So- 
ciety has gained." 

The Grocer was quite right; the private manufac- 
turers never did regain this lost trade, even though the 
" working agreement " was called off. To-day the 
C. W. S. soap works, with their tallow-collecting sta- 
tions in Australia, their copra-collecting stations in the 
Fiji Islands, and their palm-oil plantations in West 
Africa, are big enough to meet the biggest private en- 
terprise in open competition, without asking favors. 

In revenge for the injury suffered, the soap manu- 
facturers, led by Levering Brothers, made a determined 
attack on the cooperative movement through the law 
courts. Charging that cooperative brands of soap 
were substituted for theirs when the latter were called 
for, thirty suits were instituted against as many local 
cooperative societies. It was maintained that in the 
hurry and confusion of a Saturday night's trading 
such substitutions were bound to occur, even uncon- 
sciously, and the plaintiffs pleaded that the defendants 
should^be made to carry their brands, in case they were 



96 consumers' cooperation 

asked for; at least, this was the condition on which 
they were willing to compromise the suits. 

The Wholesale Society took over the defense. 
First, it agreed to announce throughout the move- 
ment what societies did not carry private brands of 
soap. The plaintiffs were not satisfied; all the local 
societies should be made to carry their brands. 

The judge before whom the test case was tried de- 
clared the demands of the manufacturers ridiculous. 
He decided against them. The case was appealed, and 
the appeal was lost. And then the Wholesale took a 
final step ; it refused henceforth to carry any private 
brands of soap at all, and supphed its constituents with 
cooperative soap only. 

The above instances are rather typical of this " class 
struggle " in the economic field, which has been ever 
since carried on between capitalism and cooperation. 
As we shall have occasion to note, later, this struggle 
seems to have been more acute on the Continent; at 
least, it has there presented itself in a more picturesque 
aspect. 

The Scotch Cooperators had had a very violent fight 
with the private interests. In 1888 the latter organ- 
ized the Scottish Traders' Defense Association and for 
almost ten years waged bitter warfare against the co- 
operative societies. At first they confined themselves 
to printed propaganda, but as the cooperative move- 
ment still continued growing, certain elements became 
desperate and resolved to resort to more violent means. 
To meet their attacks, the Cooperators organized a 
" Vigilance Committee," toward whose support the 
Wholesale and local societies contributed a fighting 
fund amounting to over one hundred thousand dollars. 

Manifestoes were issued by both sides; declarations 
of war. The capitalists began to initiate a boycott 



GROWTH 97 

and, worse still, a systematic blacklisting of working- 
men belonging to cooperative societies. 

This campaign finally culminated in a bitter fight 
between the Wholesale Society and the wholesale meat 
merchants of Glasgow. The latter held a trade con- 
ference and passed a resolution " that the fleshers of 
Glasgow pledge themselves to refuse to supply co- 
operative societies, either wholesale or retail, with 
flesh meat, or to have any commercial transactions with 
them of any description whatever." 

On the following market day, when the buyer for 
the Wholesale appeared in the market and bid twenty 
pounds for a beef, the sale was refused and the beef 
was sold to a private dealer for eighteen pounds. 
Then the Wholesale carried the matter into court, for 
the market was municipal property. The city council 
decided in favor of the Cooperators. An appeal fol- 
lowed, in which their decision was reversed. All this 
litigation naturally took time; the real fight in the 
economic arena was decided long before. 

Cut off from their source of supply, the Cooperators 
went out to the local farmers and so obtained a limited 
supply. The butchers sent out agents who threatened 
the farmers, with not much effect. Next the Whole- 
sale sent a buyer over to Canada to negotiate for di- 
rect shipments of cattle. A delegation from the 
butchers followed him and attempted to frustrate his 
mission in the Canadian market, in which they failed 
completely. Having got into direct touch with the 
Canadian live-stock raisers, the Cooperators were not 
only safe, but effected an economy. 

The net, final result was utter defeat for the traders, 
for the struggle had received a vast amount of pub- 
licity in the press and turned public sympathy toward 
cooperation. 



98 consumers' cooperation 

As already stated, this resistance on the part of trade 
interests against the advance of cooperation has mani- 
fested itself wherever the latter has appeared,, but in 
the various countries there has been a difference in 
method or tactics. In Germany the fight against the 
Cooperators has been almost entirely legislative, for 
there the private interests have had the strong sym- 
pathy and help of the ruling classes, something they 
have not entirely had in Great Britain, in spite of the 
" class struggle " theory of the orthodox Socialists. 
In Great Britain, from the royal family down to coun- 
try gentlemen Tories, including such personages as 
Earl Grey, the Marquis of Rippon, and a number of 
prominent churchmen, there has been a decided lean- 
ing in favor of the cooperative movement, sometimes 
taking the form of very strong support. 

In Germany this same aristocratic class has taken 
the side of the capitalist. Thus, as an instance, laws 
were enacted restricting the sales of cooperative stores 
entirely to members, which have had no other effect, 
however, than to swell the membership. The regu- 
lation preventing civil servants from dealing with co- 
operatives was another indication of this active oppo- 
sition on the part of those in authority. 

In the more advanced countries, however, speak- 
ing from the point of view of civil rights, the fight has 
been more or less confined to the economic field. 
Some of these clashes of interest have had decidedly 
picturesque aspects, as in Sweden and Switzerland and 
Denmark. 

In February, 191 1, the Swedish Wholesale began 
a determined effort to free itself from the domination 
of the sugar trust, from which the whole country suf- 
fered. The trust controlled the Swedish sugar mar- 
ket and, owing to a highly developed organization of 



GROWTH 99 

districts, dictated prices all over the country. It had 
at this particular time fixed the price of sugar at two 
and one-fourth oren (about three-fifths of a cent) 
above the prices prevailing in all the other sugar mar- 
kets in the world, in addition to the import duty. If 
an individual trader tried to import sugar on his own 
account, the trust would immediately lower the price 
in his neighborhood and thus drive him out of business. 

The Swedish Wholesale had obtained permission 
from the trust to supply sugar to its societies in the 
immediate neighborhood of Stockholm, but not to the 
rest of its constituent members in the provinces. All 
the other societies were obliged to buy from private 
wholesale merchants in their own particular districts, 
as specified by the trust. 

After some little quiet preparation, the Wholesale 
suddenly began importing its own sugar, in spite of 
the high duty, and to supply cooperative societies all 
over the country. The trust at once lowered its prices, 
until they were lower than in all other countries, re- 
gardless of the duty, at a great loss, naturally. But it 
had underestimated the strength of the Wholesale. 
After a long period of futile contest, it gave up the 
fight, after suffering a tremendous financial loss. The 
control of the trust over the cooperative societies was 
completely broken, while the general public, having had 
its attention attracted to the situation by the publicity 
attending the fight, turned to legislative efforts for re- 
dress, the final result being that the trust was com- 
pletely broken. 

At almost the same time the Swedish Wholesale en- 
gaged in a similar struggle against a margarin com- 
bine, with even more decisive results, for after suffer- 
ing a loss of two million three hundred thousand 
crowns, the margarin combine was obliged to dissolve. 



lOO CONSUMERS COOPERATION 

Even more picturesque was an event of this nature 
which took place in Switzerland only a few months 
before the war broke out. There a firm by the name 
of Bell & Co. dominated a large part of the meat sup- 
ply; through its extensive system of packing houses 
and chain stores it fixed the prices of all kinds of meat, 
to private dealers and cooperative stores alike. 

One day the Swiss Wholesale issued a declaration of 
war; it was determined to free at least its own con- 
stituency from the domination of Bell & Co. Only a 
few years before it had smashed a combine of big 
shoe manufacturers, and thus it went into the fight with 
the confidence given it by a previous victory. 

Even the daily press, which generally follows the 
policy of giving cooperative activities a minimum of 
space, took notice of this impending clash between two 
big economic interests. It looked as though the con- 
test might be a thrilling one. 

But just then, as hostilities were about to begin, Bell 
& Co. raised the white flag. They asked for terms. 
The terms offered by the Wholesale were that Bell & 
Co. sell out to the Wholesale. That was done. The 
Wholesale first bought a block of shares in the cor- 
poration, which gave it a controlling interest, then 
gradually ended this peculiar partnership by buying 
out the private shareholders, and so the organized con- 
sumers of Switzerland gained collective possession of 
their own meat supply. 

I might give page after page of such incidents, as 
the contest between the cement combine in Denmark 
and the Danish Wholesale, still in progress, or the re- 
cent struggle between the Swiss Wholesale and the 
chocolate dealers. In every instance the Cooperators 
have been victorious. An astonishing feature of these 
events has been the apparent ignorance of the private 



GROWTH lOI 

interests of the principles of cooperation. They do 
not seem to have realized the nature of the forces they 
have had to battle with. 

On the other hand, these passages at arms, so to 
speak, have served to bring to the Cooperators a grow- 
ing realization of the need of getting ever closer and 
closer to their original sources of supply : the land. 

Which brings me back to an event in the history of 
the English Wholesale Society which, I cannot help 
thinking, will some day be regarded as one of the sig- 
nificant incidents in the history of modern civilization 
in general. 

For some years previous to 1896 the Wholesale was 
experiencing difficulty in obtaining a regular supply of 
fresh fruit for a jam factory which had been estab- 
lished on rather a large scale. Then, in June, 1896, 
it was announced that the managing committee had 
concluded negotiations for the purchase of an estate 
of seven hundred and forty-two acres, at a cost of 
one hundred and fifty thousand dollars, on which it 
was proposed to raise fruit for the jam factory. 

Thus the cooperative movement came into first con- 
tact with Mother Earth for the purposes of produc- 
tion. It was only the first of a great number of such 
purchases. 

In 1902 the English and Scottish wholesale socie- 
ties formed a partnership for the specific purpose of 
growing their own tea in Ceylon, where a plantation 
of three hundred and sixty-four acres was then ac- 
quired. This original purchase was added to at in- 
tervals until, in 19 13, another purchase was made, ex- 
ceeding all previous ones, bringing the total acreage 
of tea plantation in Ceylon belonging to British Co- 
operators up to nearly three thousand acres. Mean- 
while several of the Continental wholesale societies 



102 CONSUMERS COOPERATION 

have also acquired their own land for agricultural pur- 
poses, notably the Swiss Wholesale, since the begin- 
ning of the war. 

As yet this phase of Consumers' Cooperation is, 
comparatively speaking, in its experimental stage, 
though big developments in this direction are now 
(July, 19 1 9) being planned. The fact that these hold- 
ings have been constantly increased would seem to 
show that results have been good. Naturally, there 
are those, with a large fund of sentiment for things as 
they are, who see in this departure something repre- 
hensible; that the people, as consumers, should grow 
their own agricultural produce on their own land and 
so enter into competition with the farmer. But this 
question we shall leave to a discussion in a later 
chapter. 

It still remains to point out that consumers' co- 
operative production is not confined to the wholesale 
societies, though it is more easily summed up, or 
visualized, through them. Almost equaling their in- 
dustries, in the aggregate, are the productive works of 
a great many of the large local societies. As already 
set forth, flour milling had been one of the leading fea- 
tures of local production, in the days when the mill 
dam had been the source of power. Milling then came 
under the influence of the tendency toward centraliza- 
tion, and it became one of the functions of the w^hole- 
sale society. But there were still many forms of in- 
dustry which were not yet, and probably never will 
be, adapted to big-scale centralization. Obviously the 
loaf of bread which is delivered to our doorstep every 
morning cannot be baked at any great distance from 
the table of the consumer; at least, not until transpor- 
tation has advanced to a point not yet in sight. 

Many of the larger local societies do their own 



GROWTH 103 

baking, especially in the Continental countries. In- 
deed, in Belgium cooperative societies have invariably 
begun with baking the bread of their members and 
only taken up other foodstuffs when baking had estab- 
lished them on a firm financial basis. There the co- 
operative bakeries assume the proportions of big in- 
dustrial plants. 

In Great Britain this usually came later, after the 
sale of foodstuffs had brought the consumers together. 
Then local societies would either take up baking by 
themselves, or form district federations for the pur- 
pose. A striking illustration of this latter practice is 
seen in the United Cooperative Baking Society of 
Glasgow, composed of a score or more of local socie- 
ties, their central plant in the city being rated as the 
biggest and most modernly equipped bakery in the 
world. In 1909 this bakery was using nearly four 
thousand sacks of flour a week for the production of 
bread and biscuits. In the baking of the latter it has 
saved the Scottish Wholesale Society the necessity of 
establishing its own baking plant, which obtains bis- 
cuits for its members all over Scotland from the Bak- 
ing Society, the net result being the same, since private 
profit is nowhere involved. In the city of Glasgow, at 
least, the United Cooperative Baking Society has revo- 
lutionized the baking industry. Previously bread was 
universally baked in small, unsanitary cellars, or base- 
ments. The Cooperators, by establishing their great 
modern bakery, brought the industry above ground 
into the light of the sun. Within recent years this in- 
stitution has extended its activities to Ireland, where it 
has two big branch bakeries in operation. 

Many local societies also carry on market garden- 
ing, some of them growing vast quantities of toma- 
toes, as an example, under acres of glass. Others 



I04 CONSUMERS COOPERATION 

have dairy farms and deliver fresh milk to their mem- 
bers every morning ; obviously the A\^holesale could not 
do this. 

Another local form of enterprise, though hardly to 
be classed as productive, is housing. This has been 
especially practiced in Scotland, Germany, and Den- 
mark, though it is also done in the other countries. 
The principle is quite different from our building and 
loan societies, in which the builder is merely supplied 
with capital. The Scottish or German local coopera- 
tive society buys the land and builds the houses, then 
rents them out to the members on the same basis on 
which it distributes groceries. In the big cities, as in 
Glasgow, Hamburg, and Copenhagen, the society 
builds a row of apartment houses and rents the sepa- 
rate apartments out. At the end of the year the profits 
are figured out and returned to the tenants, in pro- 
portion to the amount of rent paid. As Mr. ^Maxwell, 
the Scottish Cooperator, once told me, there were many 
people in Glasgow who found their rebates from their 
store purchases sufficient to pay their rent, so that 
membership practically meant they lived rent free, or, 
as he expressed it, they '' ate their way into house and 
home.'' 

I have, in this account of development before the 
war, touched very lightly on the movement on the Con- 
tinent. Naturally, Great Britain has maintained the 
lead in the progress of the movement and, to a large 
extent, the Continental Cooperators have clung close 
to British example, with the exception of Belgium, to 
whose movement I shall devote a special chapter. In 
regard to membership, Germany was fast catching up 
to Scotland before the war broke out, while considered 
in its proportion to the rest of the population, the Swiss 
movement was as big as the British. As repeatedly 



GROWTH 105 

mentioned before, big strides have been made on the 
Continent during the war, and in the chapter devoted 
to these most recent events I shall give the Continental 
countries their due mention. 

Just what the rate of increase of this world-wide 
cooperative organization, with its revolutionary inno- 
vations in the field of industry, has been since the be- 
ginning of the century can be estimated accurately in 
those countries only where the movement has been 
self-conscious during all that period. In many of 
them there was no articulated movement in 1900 and 
the importance of keeping statistics was not thought 
of. Furthermore, when figures were issued, there 
was that same confusion of forms which existed in 
England in the early days and it was impossible to 
know to what extent they referred to members of the 
consumers' movement or to members of credit unions, 
agricultural sales societies, etc. These are matters 
which the International Cooperative Alliance is only 
now beginning to clear up and standardize. 

In Great Britain the membership had passed the 
three million mark in 1913; counting each member 
as the head of a family, or household, not far from 
one- fourth of the total population. In some parts of 
Scotland and the north of England whole communities 
practically belonged en masse to the local society and 
had swept private trade entirely out of the town or vil- 
lage. Basel, in Switzerland, is said to have reached 
this point of organization, the private traders there 
supplying only travelers and foreign guests. 

Just before the outbreak of the war Germany ranked 
second in regard to membership, counting Great Britain 
as one, with 1,800,000 members. Then came Russia, 
with 1,400,000; France, 900,000; Austria-FIungary, 
500,000, and Italy and Switzerland with a quarter of 



io6 consumers' cooperation 

a million each. The rest of the ten million members 
of the whole international movement were distributed 
among the smaller countries, especially in Denmark, 
Finland, Sweden, Belgium, Holland, and Norway. 

In the matter of cooperative trading the figures were 
more definite. In 19 13, sixteen national wholesale 
societies reporting did a business of sixty million 
pounds sterling, which was well over a quarter of a 
billion dollars. This was an increase over the previous 
year of $22,700,000. No society showed a decrease; 
once established, on a truly democratic basis, it is sel- 
dom that a wholesale society ever does show any fall- 
ing off. In Germany the rate of increase was 13 per 
cent. ; Switzerland, 29 per cent. ; Bohemia, 45 per cent. ; 
Norway, 25 per cent. ; Russia, 35 per cent. ; and Den- 
mark, 13 per cent. 

These figures, of course, did not cover the total trade 
of the various national movements. Though the 
wholesale societies strictly limit their sales to coopera- 
tive societies, the local societies do not always buy all 
their supplies from the wholesales, as in the case of 
societies manufacturing for themselves. 

As for cooperative production, it m.ust be said that 
on the Continent it had hardly begun. The Germans, 
the Danes, and the Swiss had made the most notable 
beginnings, but nothing to be compared to the British. 



CHAPTER X 

THE '' MAISONS DU PEUPLE " OF BELGIUM 

As was stated in the last chapter, the development of 
cooperation in Great Britain has been followed so 
closely in other countries as not to need any special 
description in regard to principle and practice. In 
Belgium, however, certain original departures which 
have been taken are worthy of special notice, more 
especially as it seems highly probable that these 
special forms may be adaptable to this country. In- 
deed, it might be questioned whether the British them- 
selves might not study Belgian forms of cooperation 
to no little advantage to their own movement. 

By this time the reader must be fairly familiar with 
the fundamental principles of Consumers', or Roch- 
dale, Cooperation; one man, one vote; the restricted 
and fixed remuneration of capital; unlimited member- 
ship; and the return of ''profits" to the purchasing 
members in ratio to their purchases. The last feature 
is, of course, not a principle at all, but a practice dic- 
tated by expediency. And it is this practice which the 
Belgians have modified, with some remarkable results. 
The Belgian idea does not oppose itself to the Roch- 
dale plan at any point ; it supplements it, improves it. 

As in all other countries, the first attempts at co- 
operative effort in Belgium were failures. " The his- 
tory of the first twenty years of our movement," writes 
Louis Bertrand, the historian of Belgian cooperation, 
" is nothing but a record of our failures." We need 

107 



/ 



io8 consumers' cooperation 

not study them. The story is the same for all coun- 
tries. The story of the failures in this country, which 
I shall give later, might apply to Belgium, too. 

Most rare occurrence in the history of cooperation, 
the first successful attempt, which was to stamp its 
character on the whole national movement of Belgium, 
seems to have been due to the personality of one man. 

Some time in the middle seventies Eduarde Anseele, 
the son of a poor shoemaker of Ghent, then a mere 
youth, felt a strong desire to see the outside world. 
So he left his native city and began to wander all over 
Europe. He finally brought up in England, where he 
worked for a while as a 'longshoreman on the London 
docks. 

Already a Socialist, and deeply class-conscious, he 
took a keen interest in all working-class organizations. 
Having come in contact with some of the Rochdale co- 
operative stores, he observed them closely and took the 
pains to acquaint himself w^ith their internal workings. 
He was strongly impressed. 

When the boy returned to Ghent, some time after- 
ward, his mind was full of ideas suggested to him by 
the English cooperative stores. To one of his radical 
temperament, naturally, the lowering of the cost of 
living must have seemed of only secondary imiportance 
as a feature of cooperation. He saw this form of 
commercial enterprise in its broader, its social, aspect, 
as a means to accomplishing revolutionary changes in 
the whole industrial system. 

One evening he gave a talk before the w^eavers' 
union of Ghent, and, after he had described the co- 
operative movement in England, he presented a propo- 
sition to the assembled weavers wherein he suggested 
that they should bake their bread in common. But, 
instead of frittering away the profits, or surplus, of the 



THE- " MAISONS DU PEUPLE " OF BELGIUM lOQ 

enterprise in penny rebates on purchases, he suggested 
that this margin should be devoted to a collective in- 
surance fund from which the members might be helped 
in time of illness, unemployment, or other troubles 
incidental to a workingman's life. 

Anseele presented his scheme so convincingly that 
the weavers advanced him a loan of two thousand 
francs, and, with this initial capital, he rented an oven 
and began baking bread for one hundred and fifty 
families. In this way he founded the '' Vooruit " of 
Ghent. 

The scheme was simple enough. Like the Rochdale 
societies, after whose pattern it was shaped, the Voo- 
ruit carried on its business with the money advanced 
it by its members in the form of membership dues, or 
shares. Each member was entitled to just one vote 
in the affairs of the society, a board of directors, or 
committee, being elected by them to carry it on. 

The bread was sold at the usual market price, and 
at the end of the quarter the profits could be returned 
to the purchasing members, in proportion to the 
amounts of their purchases. But, unlike the Roch- 
dale societies, the members allowed this surplus to ac- 
cumulate and to become a mutual benefit insurance 
fund. 

From the very beginning the Vooruit prospered. 
At the end of the first year four hundred families had 
subscribed to the working capital and were getting 
their daily bread from the communal oven. The ma- 
jority probably did not understand the theory behind 
this peculiar enterprise and gave it their support only 
because they were made to understand by their leaders 
that they were supporting the labor movement in some 
vague way. The benefits were not immediately appar- 
ent, for the prices were just the same as in the private 



no CONSUMERS COOPERATION 

bakeries. With each loaf of bread came a ticket. 
The housewife collected these coupons because her 
man told her to do so. A little pamphlet, entitled 
'' AA'hy ^vlarie Should be a Cooperator,'' tried to ex- 
plain in simple language the principle on which the 
^^ooruit worked. But the first object lesson would 
come at the end of the first quarter when, on returning 
the tickets to the little office in the bakery, ]\Iarie 
would find that they had a certain purchasing value in 
that free bread could be procured for them. Thus a 
certain percentage of the profits was returned to the 
purchasers, but not in cash. The bulk of the surplus, 
however, was accumulating in the treasury of the so- 
ciety. 

Then, gradually, Anseele, who probably had a pretty 
free hand in those early days, began to put his special 
theor}- into practice. 

^larie's husband was out of work. Xow would rise 
the question as to whether this new bakery would ex- 
tend credit, as the little baker in the cellar around the 
comer had done before. Ready cash was no longer 
available. Yet everv morning; the dogfcart from the 
\^ooruit would appear and deposit the daily loaf on 
the doorstep as usual. 

When ^larie's husband found work again, she had 
before her the problem of paying up the arrears on the 
bread bill. To her lively surprise, there would be 
nothing to pay. 

Xext came a period when one of the children was 
ill. A doctor appeared, cured the child, and would 
take no fee. There was not even a bill for medicines. 

" The Vooruit pays me,'' the doctor explained, smil- 
ing. 

" But where does the A^ooruit get the money to pay 
for these things?" Marie would ask her man. Piet, 



THE MAISONS DU PEUPLE OF BELGIUM III 

having attended the meetings of the society, would be 
able to explain. 

" We pay. When we buy our bread from a private 
baker, he makes a profit from us, which he puts into 
his own pocket. The Vooruit, being our own bakery, 
uses this profit for our own benefit, when we most 
need it." 

This, in its initial stage, was Anseele's scheme. It 
did include the return of the profits to the purchasing 
members, not exactly in proportion to purchases, per- 
haps, but in such a way as to work on the heartstrings 
of the recipients; when they most needed it, in fact. 
Being a workingman himself, Anseele understood the 
psychology of his people. It was his mode of propa- 
ganda, and propaganda, he realized, must appeal to the 
emotions, rather than to the brain. Utilized for a 
better purpose, it was merely the same appeal which 
the Tammany politician makes when he sends the poor 
widow a ton of coal in his district or when he bails out 
the workingman of his constituency who has come 
into violent contact with the police during a Saturday 
night's spree. Only Anseele systematized the idea. 
Indeed, with all the Socialist's horror of charity, he 
spared no pains in making it plain to the members and 
their wives that this manner of giving was not charity: 
that they themselves paid the bills. 

Anseele had need to weave the emotions of his peo- 
ple into the organization he was building, for pres- 
ently he was to find himself violently opposed by an 
organization quite as adept in this same sort of prac- 
tice — the Catholic Church. 

The priests, as soon as they realized the growing 
strength of the Vooruit, lost no time in attacking it. 
Not that they were opposed to cooperation in itself, as 
a practice, at least, but they were decidedly against the 



112 CONSUMERS COOPERATION 

theoretical Socialism which Anseele and the other lead- 
ing spirits of the society preached. 

" We are bombarding the capitalist citadel with 
loaves of bread," he had said, in one of his public 
speeches. 

The priests lost no time in empty abuse or vitupera- 
tion, but began organizing a society based on the same 
principles as the Vooruit, except that they were the 
management committee. 

Here was the first check to Marie's enthusiasm for 
the Vooruit: to decide between that and her loyalty 
to the Church, whose priests told her to use all her 
powers of persuasion to get her man away from the 
influence of those dangerous agitators, the Socialists. 
Nor was it merely a matter of faith. Nearly all her 
simple pleasures and those of the children were bound 
up with the Church. The parish priest organized all 
their festivals and entertainments : while the men could 
go to the cafes, the women and children were depend- 
ent on the parish house for such recreations as were 
proper for them. 

" The priests have learned cooperation from, us," 
said Anseele, when the Cathohc baking societies began 
to appear; " now we must learn from them. Without 
the women our bakery can never prosper. We, too, 
must give them dance music." 

Shortly after "0ns Huis " (Our House) was 
opened by the Vooruit — the first of those peculiar 
social centers famous in Belgium under the name 
" maison du peuple." Every tourist passing through 
the country is familiar with that name. 

But in those early days 0ns Huis attracted very 
little attention ; it was a modest little clubhouse, rented 
from the profits of the bakery. Here the men could 
gather to read the papers, play a game of dominoes, 



THE " MAISONS DU PEUPLE " OF BELGIUM II3 

and hear a song from a comrade once in a while. A 
buffet dispensed coffee, soft drinks, and beer at a 
slight profit. Save for the absinth and the gin, it 
was a substitute for the cafes. 

Then the men were encouraged to bring their wives 
and children. Music and dancing were introduced. 
The leaders brought their families to start things off. 
Little by little other forms of recreation were added, 
and the control was shared by the women. 

In 0ns Huis, for the first time, Marie found herself 
participating in the same pleasures with her husband. 
As nothing stronger than beer could be had, Piet spent 
much less than he had spent in the cafes ; everything 
was cheaper, for there were no profits to be made for 
anybody. On the contrary, it was known that there 
was a deficit, and that the bakery made it good. The 
good philanthropist behind this first Belgian social cen- 
ter was the people themselves. 

From then on the membership of the Vooruit ex- 
panded rapidly. All over Belgium similar societies 
were organized. In Jolimont " L'Progres " made a 
similar appeal to the coal miners, and there the gin 
mills were an enemy even more potent than the priests. 
But LTrogres won out; it put the gin mills out of 
business by establishing a cooperative brewery whose 
beer was so good and cheap that the miners all joined 
the society; practically the whole population became 
affiliated. 

Just before the war there were slightly over two 
hundred such cooperative centers all over Belgium, all 
patterned after Anseele's Vooruit. 

The commercial success of the cooperative enter- 
prises in Belgium is their least remarkable feature ; 
they have not had the time to develop such gigantic 
establishments as in Great Britain or Germany or 



114 CONSUMERS COOPERATION 

Switzerland, especially in the field of production. But 
in 1912 the Vooruit's bakeries employed nearly one 
hundred bakers, working under model union condi- 
tions, turning out one hundred and ten thousand loaves 
of bread a week. Besides the two bakeries the Voo- 
ruit owned a big department store, twenty-one gro- 
ceries, five clothing and six shoe stores, a coal depot, 
a chain of drug stores, a large brewery, and one of 
the biggest printing establishments in Belgium, all net- 
ting a yearly surplus of a quarter of a million dollars. 
In Brussels and Jolimont the figures are even more 
impressive. 

About thirteen years ago the Royal Club of Ghent, 
an organization corresponding somewhat to our Union 
League Club, in New York City, found itself in finan- 
cial difficulties. Its clubhouse, a palatial building with 
a park surrounding it, was put up for sale. At once 
the Vooruit presented itself as a buyer. 

But the residents of the district, prosperous mer- 
chants and officials, objected so strongly to having a 
workingmen's resort in that neighborhood that the 
trustees of the club were forced to call off the negoti- 
ations with the Vooruit. Finally the building and 
grounds were sold to a stranger, representing himself 
as the agent for a wealthy foreigner who wished to 
take up his residence in the city for business rea- 
sons. 

The following Sunday the residents, who had con- 
gratulated themselves on having rid themselves of an 
unpleasant prospect, were awakened at an early hour 
by the sounds of a brass band and a volume of cheers. 
Looking out of their windows, they saw a black col- 
umn of working people marching up their quiet streets 
and turning into the grounds surrounding the Royal 



THE " MAISONS DU PEUPLE " OF BELGIUM II5 

Club building. A short time afterward they saw the 
Vooruit's flag floating over the roof. 

In this way the Vooruit acquired its big clubhouse, 
of which the modest little 0ns Huis is now only a 
branch. Some years ago a leading American magazine 
{Everybody's) devoted a whole article to it, giving 
full-page illustrations of the mural decorations, which 
were executed by Jules van Biesbroeck, the famous 
Flemish painter and sculptor, whose studio occupied 
a part of the top floor. Here, before the war, he con- 
tinued his work, subsidized by the members of the 
Vooruit to create a new art which should interpret the 
struggles of the labor movement. One of his marble 
groups, " Vers L'Emancipation," has gained him an 
international reputation and is reproduced as a frontis- 
piece in many of the pamphlets published by the Fed- 
eration of Belgian Workingmen's Cooperative Socie- 
ties. 

It would be difficult to compare this " house of the 
people " in Ghent with anything in this country. The 
community-center movement here is striving toward 
something in this direction, but none of its promoters 
has yet suggested anything on the scale of the Vooruit's 
clubhouse or the great " Maison du Peuple " of the 
Brussels society. 

Here Marie, Piet, and the children could spend their 
evenings and Sundays, dancing, enjoying moving- 
picture shows, or gathered about a table in the cafe 
talking and listening to music. Or, if they felt more 
seriously inclined, they might climb the broad stair- 
case past Van Biesbroeck's marble groups, and listen 
to lectures, debates, concert recitals, or read in the big 
library. Or they might go to the theater; they would 
be pretty sure to like the play, for previously they had 



ii6 consumers' cooperation 

participated in an election, choosing both plays and 
actors for the season. Maeterlinck's plays were said 
to have been most represented : that may have been na- 
tional pride more than good taste. 

In summertime they could promenade the garden 
walks, listening to the music from the bandstand,- or 
they could sit by the tables under the trees, drinking 
coffee, lemonade, or beer. Every recreation that a 
normal human being might demand could be had here, 
for all was under the democratic control of the pleas- 
ure seekers themselves; they were the owners as well 
as the patrons, and if the Board of Seven failed to give 
them what they wanted they could recall it from office 
whenever they desired. 

Naturally, however democratic the system might be, 
some of the ideas had come down from above ; Anseele 
and his associates made their influence felt. The edu- 
cational features of many of the activities were not 
conceived by Piet and Marie; they never dreamed of 
dramatic or literary circles until they were presented 
to them. 

The children's traveling clubs were one of these 
features. 

In the summertime one of these clubs would start 
out on a walking tour. Its route would be so miapped 
out that each evening would find the tramping mem- 
bers in some Cooperative center. As they approached 
the towm the local Cooperators would march out to 
meet them, and together they would walk back into 
the town behind the local cooperative band. After the 
evening's entertainment each member would find free 
lodging with a local family. When the march was 
resumed in the morning, probably the local traveling 
club would join the march. And so these tours would 
continue across the frontier into Holland, France, or 



THE MAISONS DU PEUPLE OF BELGIUM II7 

Germany, where there would be no dearth of hearty 
cooperative welcomes. Latterly these tours had taken 
on more pretentious dimensions, extending to Switzer- 
land and England, the added cost being only in the 
train fares. 

Of course, only the older children and adults could 
participate in these walking tours, but the younger 
children got their trips, too. Special bureaus in the 
various centers arranged for a systematic exchange of 
children between the families in the Flemish and 
French provinces, the object being that the children of 
'both national sections of the country should learn both 
languages by intimate association with each other. 
During the general strike of 19 13 these bureaus were 
kept busy sending thousands of children out of the 
country; to some hundreds of them the strike meant 
only a jolly vacation trip to Paris. It was this system 
which proved so suggestive to the Lawrence strikers in 
191 1 ; in Lawrence the Belgian immigrant mill hands 
had organized the Franco-Beige Cooperative Society, 
and it was its members who suggested the sending of 
the Lawrence strikers' children to other cities. 

The same human element runs through all the ac- 
tivities of the Belgian societies. (I am still justified 
in speaking in the present tense, as will be obvious in 
my chapter on the war.) Even emergencies are han- 
dled in the same spirit. Nothing illustrates this better 
than a story that is told of the Maison du Peuple in 
Brussels. 

The workingmen in a quarry not far from Brussels 
had, gone on a strike for higher wages. Being all 
stanch Catholics, they were not affiliated with any gen- 
eral labor organization, so they neither asked nor re- 
ceived any outside help. As a consequence their re- 
sources were soon at an end, and finally their hungry 



Il8 CONSUMERS COOPERATION 

families compelled them to call a general meeting for 
the purpose of discussing the proposition of going 
back to work. While they were talking four big trucks 
drove into the village and drew up before strike head- 
quarters ; each was heavily loaded with foodstuffs and 
above each fluttered the flag of the Maison du Peuple 
of Brussels. The meeting adjourned, the strikers 
cheering and all trying at once to embrace the four 
truck drivers. The strike was won. 

Naturally, every one of those quarrymen became an 
enthusiastic Cooperator. 

At the present time many of Anseele's original in- 
surance and recreational features have been enlarged 
or amplified. The benefits have expanded widely. A 
certain period of steady purchasing entitles the older 
members of the Vooruit to a pension, increasing with 
each year. Day nurseries for the w^orkingwomen have 
become a regular institution. Through this system of 
cooperative insurance and recreations the Belgian labor 
movement has acquired a solidarity which can perhaps 
not be equaled in any other country. It was Anseele's 
theory that a really vital organization must be knit 
together by the heartstrings of its individual members, 
and, acting on this belief, he really created such an 
organization. 

There can be little doubt that the Belgian coopera- 
tive movement would have expanded much more than 
it has had it not been for certain features that have ap- 
parently acted as a handicap to expansion. 

The first of these unfortunate handicaps is un- 
doubtedly the close relationship, the identity, in fact, 
of the cooperative movement and the Labor party, a 
Socialist political party. It is one thing for a na- 
tional cooperative movement to go into politics on its 
own basis, to protect itself against adverse legislation. 



THE '^ MAISONS DU PEUPLE ** OF BELGIUM 1 19 

It is quite another thing for it to harness itself closely 
together with a political party based on a series of un- 
demonstrated bookish theories conceived in the minds 
of dreaming idealists, however uplifting they may be 
in spirit. In Belgium the recruit to the cooperative 
society must accept the whole orthodoxy of Socialist 
faith. This, first of all, has kept out that element 
which, though possessed of an open mind, refuses to 
bind itself to any creed whatsoever. Only one who is 
temperamentally a Socialist will bind himself to a So- 
cialist party. If the cooperative society is attached to 
this as an integral part, he refuses to join it on those 
conditions. Thus the cooperative movement in Bel- 
gium, while growing in depth, has been confined within 
the boundaries of the political Socialist party. 

The second unfortunate feature of Belgian coopera- 
tion has been the inability of the local societies to ap- 
preciate the importance of closer federation, especially 
for the purpose of production. Here the Socialist na- 
ture of the movement has had some influence ; the So- 
cialist attitude that it is more important to fill the 
coffers of the political party than to develop the co- 
operative organization back to original sources of 
supply. Satisfied with the results from the distribu- 
tive enterprises, they have not thought it worth while 
to push on to production, but have concentrated their 
energies to spreading Marxian propaganda and get- 
ting their members elected to the National Assembly. 

Another reason for this backwardness in the field 
of production has been the sentimental regard for the 
self-governing workshop groups of workers. A hand- 
ful of workingmen exploiting a quarry, or a dozen 
sabot makers, calling themselves a cooperative society 
and employing the familiar Socialist terminology, have 
appeared to many of the Belgian leaders as the true 



120 CONSUMERS COOPERATION 

goal of the working classes striving for their eman- 
cipation. They, like the Christian Socialists of Eng- 
land, have also been obsessed of the fallacy tha.t each 
worker should have his own tools in his hands. 

Fortunately the Manchester idea has been gaining 
ground rapidly of recent years. The Wholesale So- 
ciety, with headquarters in Antwerp, has steadily pro- 
gressed within the past few years, and among the 
younger generation are those who realize the broader 
conception of collectivism. 



CHAPTER XI 

COOPERATION DURING THE WAR 

Though a revolutionary movement in ultimate pur- 
pose, it will be noted that cooperative activity com- 
prises mainly a series of commercial and industrial en- 
terprises, varying from a small store to factories which 
are the biggest of their kind in the world. In practical 
details, at least, these establishments are operated by 
very much the same methods that a capitalist would 
employ, and they are, one might well assume, subject 
to the same economic laws that control industry in 
general. It was, therefore, natural to expect the same 
depression and dislocation within the cooperative move- 
ment, when war threatened, that industry and com- 
merce in general always suffer on such occasions. 
Hundreds of thousands of members being called to the 
colors and diminished incomes on the parts of their 
families would logically result in a falling off of co- 
operative trade. At any rate, it seemed more than 
probable that cooperation would suffer a decided set- 
back during the war; at the best it might barely hold 
its own. 

What actually did happen was unexpected by both 
friends and foes of the movement. 

All those who followed the dispatches at the time 
will remember the mad food panic that followed 
the declaration of war. Those who had ready cash, 
fearing all sorts of disruptions in the general supply 
of foodstuffs, rushed frantically to the stores and be- 

121 



122 CONSUMERS COOPERATION 

gan laying in supplies for weeks, sometimes months, 
ahead, leaving the poorer classes to face the exorbitant 
prices of the speculators. This was the situation 
which faced the cooperative stores as well as the 
private dealers. 

A hasty survey assured the officials of the English 
and Scottish \\'holesale Societies that they had on 
hand enough of all the necessities to supply the normal 
needs of their members for several months. Reas- 
suring messages were sent to all the local-store com- 
mittees, with the advice that they restrict all sales to 
individuals to their previous average rate of pur- 
chasing, but not to raise prices. 

This was done by all the stores. The result can 
readily be imagined. The whole consuming public 
swung over to the cooperative stores. Before some 
of them people stood in line blocks in length. 

It required only twenty-four hours of this situation 
to make the wholesale officials realize that their cal- 
culations were going to upset. They were not going 
to supply the whole population and then let their 
own members suffer a week or two hence. Where- 
upon there were general instructions to sell only to 
members. 

The result of this ruling was that there was a wild 
rush of applicants for membership. One London store 
enrolled three hundred in one forenoon. This brought 
back the same old situation. And then the stores tem- 
porarily debarred all new members, and something like 
normal conditions were restored. 

Meanwhile the panic in the open market continued. 
A\'hen the private dealers were charging twelve cents 
a pound for sugar, the cooperative stores in the same 
districts were charging only five cents. Up in Scot- 
land coal dealers sent up the price of coal day by day, 



COOPERATION DURING THE WAR 1 23 

pleading the unusual risks of the sea as the pretext. 
The Aberdeen Cooperative Society, which owns its own 
steamers, after allowing the crews a raise of forty 
per cent as compensation for the added risks, trans- 
ported coal at a raise of only twelve cents on the ton. 
Private landlords were raising rents all over. The 
cooperative societies did not raise rents one penny. 
Then came a popular agitation for government regula- 
tion of prices, and at the head of the agitation were 
the officials of the cooperative societies. This made 
an especially strong impression on the public, for the 
private traders were all on the other side, shouting 
the familiar phrase, *' Let us alone." 

At the end of the year these events were to be 
crystallized into cold figures. It was then that the 
general secretary of the Cooperative Union reported an 
increase in the general membership during the past 
year of 176,750. Compare this with the average 
yearly increase during the past forty years ; 70,000. 

For the same period the local societies reported a 
trade of $692,360,000, an increase over the previous 
year of $42,000,000, which was a ten times bigger in- 
crease than the year before. The English Whole- 
sale reported sales amounting to $175,000,000, a ten 
per cent increase, as compared with only five per cent 
the year before. 

So much for Great Britain — covering the first 
six months of the war. Meanwhile, what was hap- 
pening in other countries ? 

In Germany the food panic was even more acute 
than in Great Britain, for the Germans realized that 
the British navy was going to destroy their sea com- 
merce completely. 

During the panic the German stores followed the 
same policy as the British; they did not raise prices 



124 CONSUMERS COOPERATION 

SO long as supplies could be had. Outsiders began 
joining, more than replacing the many thousands of 
members drafted into the army. The civil servants 
who, it will be remembered, were forbidden to join 
cooperative societies, now rose against this govern- 
ment ruling, and so determined was their stand that 
the higher authorities rescinded the restriction. 

" It is owing to this change of attitude on the part 
of the government," wrote one of the Wholesale offi- 
cials, referring to this incident, '' and to a more clear- 
sighted view of things on the part of the public that 
the cooperative stores have been able to maintain, and 
often to increase, their trade. For example, the co- 
operative bakery in Hamburg has had to record an 
increase of sales each week, in spite of the fact that 
the purchasing power of nearly all consumers has 
decreased. The societies at Frankfurt, Brandenburg, 
and elsewhere have to report similarly . . . The Ger- 
man cooperative journals continue to appear regularly 
and are profiting from the lessons of the present time 
by conducting an active propaganda in favor of co- 
operation. If the political parties have declared a 
truce (meaning the Socialists, especially), economic 
organizations have not laid down their arms and 
their antagonism is no less acute." 

" Produktion," the cooperative society in Ham- 
burg, reported at the end of the year: 

*' On December 31 the membership of the society 
stood at 78,517, whereas a year ago it totaled only 
68,417, so that there was an increase of over 10,000 
during the year . . . Sales were $6,161,000, which 
is an increase of $276,740 ... To the 27,159 savings 
accounts which we had a year ago, 4,439 were added, 
while only 2,604 were closed." 

The German Wholesale Society had a turnover 



COOPERATION DURING THE WAR I25 

of $40,000,000, which was an increase of $870,000 
over the year before. 

From France there were no such encouraging fig- 
ures; there, indeed, the movement seemed to have 
been heavily stricken. For fully one-third of the local 
societies were situated in just those districts in the 
north where the actual fighting was going on. Even 
when nothing worse happened to them, these northern 
stores were unable to obtain supplies because all means 
of transportation had been monopolized by the military 
or else disabled through the destruction of bridges or 
roadbeds. 

In territory actually invaded by the Germans many 
stores suffered the same destruction from gunfire that 
the rest of the community did. The Magasin de 
Gros, the French Wholesale Society, had several of 
its warehouses situated in this region, at Chateau- 
Regnault, which were destroyed during the battle of 
the Meuse. 

But it seems that after the German soldiers had 
once entered a town, the cooperative stores some- 
times escaped where their competitive neighbors did 
not. The story of an incident that happened in one 
town, Chateau-Thierry, on the Aisne, reported by one 
of the French Wholesale ofificials, seems to be typical 
of a number of such cases. 

The town had suffered a heavy bombardment, the 
French had retired, and many of the civil population 
had followed them. But the manager of the local 
cooperative store, together with his clerks, determined 
to remain behind and do what he could to protect the 
society's property. 

When the German soldiers entered the town they 
began looting, and the manager of the cooperative 
store expected that presently his establishment would 



126 consumers' cooperation 

suffer the same fate. And, in fact, shortly the store 
was crowded with German soldiers, all demanding 
goods. 

But to the intense surprise of the manager and his 
clerks, the Germans grinned at them good-naturedly 
and offered full payment for what they took and some- 
times even refused change, while several insisted on 
shaking hands. 

For some hours the store did a roaring business, 
though the manager, not understanding German, re- 
mained deeply puzzled as to why the store was being 
shown such special consideration. Later on, when 
he had occasion to go outside, the puzzle unraveled 
itself. 

Looking over the doorway, he found that above 
the French word " Cooperative " on the sign had been 
chalked the German equivalent : " Consumgenossen- 
shaft." To this was added an inscription which a 
townsman was able to translate into '' these are co- 
operative comrades, boys; don't harm them." 

A German soldier who was wounded and came to 
this country soon after the outbreak of the war, tells 
me that while shelling a French town at rather close 
range, the men of his battery, all of whom were So- 
cialists or Cooperators, persistently refrained from 
firing at a building above whose front doorway they 
could see the sign of a cooperative store, with the re- 
sult that the store was the center of a small group of 
buildings standing intact amid the general ruins. That 
this incident may probably be typical is indirectly 
verified by the report of a French cooperative leader, 
who remarks that in several shell-raked towns only 
the cooperative store had escaped. 

Taking the French cooperative stores outside the 
actual field of military operations, it was apparent 



COOPERATION DURING THE WAR 12/ 

that they had the same stabilizing effect on economic 
conditions as in other countries. 

" In the mining districts," reported the Magasin de 
Gros, "economic Hfe runs on normal lines and we 
are besieged with orders, which can not always be 
filled. The factory at L'Orient is working as usual 
and, commercial life in Paris being practically at a 
standstill, our sales at Bordeaux have increased. It 
does not seem that the Magasin de Gros will have 
much difficulty in attaining its usual turnover at the 
end of the war, in spite of the loss of the warehouses 
in the Ardenne." 

" We have assisted the National Relief Committee," 
said another report, " and our Wholesale was espe- 
cially intrusted with the distribution of coal. We ap- 
proached the Swiss organization Maggi with regard 
to the sale of milk in Paris and were successful in 
obtaining this for the population at unexpectedly low 
prices. Moreover, our management of the workshops, 
established by the Socialist party, the General Con- 
federation of Labor, and the National Federation of 
Cooperative Societies, intended to remedy unemploy- 
ment by the execution of work for the military authori- 
ties, has won us universal sympathy." 

In Belgium, it was supposed, the disaster to the co- 
operative movement must be even greater than it had 
been in France. For months no news came through. 
And then, gradually, reports trickled through, of which 
the following, published as a news item by the Vor- 
wdrts, of Berlin, is only one : 

*' The large cooperative society, Vooruit, in Ghent, 
has enrolled 1,350 new members since the beginning 
of the war. The cooperative weaving society in the 
same town sends its productions in carts to such places 
as Liege and Charleroi, journeys of four days . . . 



128 consumers' cooperation 

During the war a wholesale depot has been opened in 
Ghent, to supply the Flemish societies. Latterly the 
society at Dinant, in the valley of the Meuse, has 
opened a new distributive center amid the ruins of 
the town." 

Returning to those belligerent countries for w^hich 
figures are available, Austria is the only instance in 
which a decrease of wholesale trade is reported, 
amounting to about a million crowns, and this was 
said to be entirely due to dislocation of transportation 
facilities. The local societies reported an immense in- 
crease of trade, but being obliged to obtain their sup- 
plies from private traders, much of the increase was 
probably due to higher prices. 

The Wholesale Society in Prague, however, sup- 
plying the Bohemian societies, reported an increase of 
sales during the year amounting to 112,000 crowns, 
which was three and a half per cent higher than the 
year before. 

For Hungary the figures were more detailed. Ac- 
cording to a government trade report (and it must 
be remembered that in Hungary there was the same 
animosity from higher up against the Cooperators as 
there was in Germany), the increase in general mem- 
bership was 11,883, or three and a half per cent, 
while the total trade was 106,000,000, an increase of 
6,000,000 crowns. 

Russia I have left to the last, for here the develop- 
ment of cooperation has been the most marked of all 
during the war, but for the present we are only con- 
sidering the first six months of the year. This subse- 
quent development, which I shall consider in its proper 
place, did not as yet make itself obvious in the re- 
ports of the Wholesale Society, in Moscow, for the 
year 191 4. The sales during that year were a little 



COOPERATION DURING THE WAR 12^ 

over $5,000,000, as compared to about $4,000,000 in 
19 1 3, the increase amounting to less than twenty per 
cent. The Russian Wholesale did not represent the 
whole national movement, for it was little more than 
a district federation. But from all over the country 
came reports indicating that the cooperative societies 
were growing, not only in size, but in numbers. 

In many municipalities the authorities turned over 
the whole problem of food supply to local societies, 
helping them out with loans. One notable case of this 
kind was in the Siberian city of Omsk, where the city 
commandeered store buildings, that the cooperative so- 
ciety might establish branches in all quarters of the 
city. 

From this brief survey of the cooperative move- 
ment covering the year in which the war began, it 
will be seen that the outbreak of hostilities had de- 
cidedly a stimulating effect. That this same stimula- 
tion was noticeable to quite the same degree in the 
neutral countries will no longer be surprising, since 
there, at least, the members were not drawn off into 
the military camps. 

Viewing this period in perspective, the cause will 
at once become obvious. The war threatened to in- 
terfere with the food supply. Scarcity, to the point 
of famine, seemed to the people imminent. Most 
of the available stores of foodstuffs were in the hands 
of the private dealers. They, naturally, were not go- 
ing to miss the opportunity to make what personal 
profit they could from the situation. They advanced 
their prices to the uttermost point of endurance on 
the part of the public. Without any reflections on 
their moral qualities as persons, it was only natural 
that they should do so; such action was inherent in 
the private-trading system. 



i30 consumers' cooperation 

With the cooperative stores there was no such im- 
pulse. As happened in several of the belligerent coun- 
tries, notably in England, the cooperatives also had 
immense quantities of foodstuffs on hand, either in 
their local warehouses or in the warehouses of the 
wholesale societies. But these goods had passed out 
of the domain of capitalist trade, or industry. They 
were no longer on the market. These goods already 
belonged to the members of the movement as truly 
as though they already had them stored away on their 
pantry shelves. They had been bought and paid for 
out of the working capital of the societies, which con- 
sists of the shares of the members. In seeming to 
pay for them over the counter, the members were 
merely making good the deficit in the share money 
which the purchasing of the goods had caused. The 
officials, or the paid store clerks, naturally, had neither 
the right nor the incentive to raise the price of goods 
which did not belong to them, of which they were 
merely the custodians. Thus the Cooperators were, 
unconsciously, perhaps, in the position of people who 
had laid by provisions for some months ahead. The 
tremendous influx of new members merely represented 
the selfish desire on the part of the outside public to 
share in their good fortune. 

This situation, however, was only peculiar to the 
first few months of the war. Even in England and 
Scotland these stores of goods were bound to be- 
come exhausted. The question would then arise: 
what happened, then, when the cooperative societies, 
on an equal footing with the private merchants and 
manufacturers, must reach back to original sources of 
supply and procure goods under the difficult condi- 
tions created by the war? By this time a real scarcity 
of foodstuffs existed and the government had to some 



COOPERATION DURING THE WAR I3I 

extent curbed speculation and abnormally big profits. 
The two systems would now be on more equal terms. 
It was now that the real test of the comparative effi- 
ciency of the two systems would be made. 

Fortunately there is no lack of concrete evidence 
of the final result. 

In years previous to the war the English Wholesale 
had been increasing its trade at the average rate of 
about five per cent a year. The unusual demands 
made upon it at the outbreak of the war had sent its 
sales up to a ten per cent increase. 

But in 191 5 its sales leaped up to over $215,000,000, 
an increase of over $40,000,000, or 25 per cent. The 
Scottish Wholesale did almost as well; its rate of 
increase was 21 per cent. Meanwhile, during the year 
another 122,584 householders had considered it to 
their advantage to join the local societies, bringing the 
total membership up to 3,310,724. 

Much of this increase of trade was undoubtedly due 
to higher prices. But during 19 16, when high prices 
had been more or less established, when government 
regulation was in full swing and scarcity of provisions 
must have caused a tendency toward restricted sales, 
the rate of increase continued almost the same. The 
turnover of the English Wholesale went up past the 
quarter of a billion dollar mark, to $261,000,000, rep- 
resenting a gain of 21 per cent. The Scottish Whole- 
sale beat its previous record, registering an increase of 
2^ per cent. And again the record was broken for in- 
creased membership; about 200,000 heads of families 
had joined — a million consumers — and had brought 
the total membership up to over 3,500,000. 

During the years 19 17 and 19 18 the increase in the 
yearly business of the C. W. S. was at the rate of 
I2j^ per cent each year, bringing the total sales for 



132 CONSUMERS COOPERATION 

19 18 Up to about $326,000,000. This might seem 
like a settHng down to normal conditions, but for the 
fact that the business for the last half of 1918 was 
so very much higher than for the first half; $178,226,- 
000. This was an increase of 26 per cent over the 
same period the year previous; it was more than the 
sales for the whole year of 1914, when the war be- 
gan. Obviously a scarcity of provisions was making 
itself felt. With the signing of the armistice this 
restraint was removed and business made another 
leap. 

The volume of business of the English Wholesale 
Society has about doubled during the war. 

As for the increase in membership for all of Great 
Britain, standing now at about 4,000,000, that has 
amounted to about one million heads of families dur- 
ing the war period. Which means that close to a 
third of the total population derives at least a part of 
its necessities from the movement. 

A peculiar feature of the development of the British 
movement during the war has been the increased acqui- 
sition of " original sources of production " ; land. 
Extensive purchases of tea estates were made in Cey- 
lon and southern India, bringing the total acreage up 
to over 30,000 acres. During 191 7 the two British 
Wholesale Societies bought 10,000 acres of wheat 
land in Canada, as an experiment in wheat production. 
In England the C. W. S. has purchased farm lands 
very extensively, most of them already laid out in 
fruit. The extensive profiteering (a word which, by 
the way, was first coined by the cooperative journal- 
ists) carried on in agricultural produce has led to 
this program. How successful these experiments in 
consumers' agricultural production have been may be 
judged from the fact that during the past few months 



COOPERATION DURING THE WAR 1 33 

the C. W. S. has issued $12,500,000 in " development 
bonds," all of which have now been sold to local so- 
cieties and labor unions, some of the former buying to 
the extent of $250,000. The proceeds of this financial 
transaction will, as the name of the bonds indicate, 
be devoted to the development of original sources of 
production; in the purchase of agricultural lands, both 
at home and abroad. This tendency on the part of 
the British consumers to acquire ownership of the 
sources of agricultural production is, in my opinion, 
the most revolutionary feature of cooperative develop- 
ment which has yet taken place, to which I shall have 
occasion to refer again in a later chapter. 

Of the Continental countries I shall turn to Germany 
first, third in order, after England and Scotland, be- 
fore the war. The German Wholesale Society, in 
Hamburg, had been creeping slowly up toward the 
Scottish Wholesale, averaging, as it did, for some 
years, a 20 per cent increase. And here, at first glance, 
judging solely by the trade of the Wholesale, Ger- 
man cooperation had suffered a decided setback dur- 
ing 191 5 and 19 1 6. In the former year the falling 
off had been 3 per cent, in the latter 12 per cent. 

Yet offsetting this is a record of a steady increase 
in general membership. In 19 14 the membership of 
the local societies affiliated with the Central Union 
amounted to 1,700,000. In 191 5 about 150,000 new 
members joined. In 1916 another 150,000 had joined, 
bringing the total up to about 2,000,000. And in 19 17 
there was a further increase of 137,000. This, in spite 
of the fact that during this period nearly every able- 
bodied German had been called to the front. 

As for the local societies, their trade had shown 
a decided increase. During 191 5-16 a hundred new 
stores, either independent societies or branches of older 



134 CONSUMERS COOPERATION 

societies, had been opened, while the volume of trade 
during 1916 jumped from 493,000,000 marks to 577,- 
000,000 marks, which was exceeded in 19 17, when 
the increase was 30,000,000 marks. 

Turning again to the Wholesale Society, we find 
that the saving deposits intrusted to its care during 
the first two war years had doubled, rising from 
22,000,000 marks to 44,ot)0,ooo marks, its reserve 
capital also being enlarged by over half a million 
marks. In 191 7 the deposits had increased to nearly 
72,000,000 marks. During the year 19 16 the produc- 
tive departments had been enlarged and their output 
increased to the extent of 9,000,000 marks. 

Why, then, should its sales to its own societies have 
lessened? 

Simply that the Cooperators, unlike their Socialist 
comrades, had the temerity to denounce the war as 
'' barbarous murder " ; to announce again and again, 
at their meetings and conferences and through their 
official organs, that they were absolutely opposed to it. 
The Socialists had been received with open arms by the 
imperial family. Not so the Cooperators. As a 
measure of " straaf " the Imperial Food Control 
Board had consistently and continuously followed a 
policy of discrimination against the Wholesale Society 
in favor of its private competitors. The complaint 
against this treatment rings through every report and 
was the subject of a strong resolution of protest 
passed by a national congress held in 19 17. 

Yet H. Kaufmann, director of the Wholesale So- 
ciety, finds it possible to say : 

'' Cooperative development (in Germany) during 
these war times has achieved a victory such as we 
had not dared to hope for and it gives us the assur- 
ance that we shall record still greater success in the 



COOPERATION DURING THE WAR 1 35 

new times which are coming and which will be rung 
in by the bells of peace." 

In Austria the government's previous prejudice 
against cooperation did not blind it to the great service 
the movement had been to the people during the trying 
war times. Early in 19 16 the Minister of War called 
together in conference a number of labor leaders and 
the officials of the Austrian Wholesale Society. He 
proposed that the 200,000 munition workers and other 
government employees in and around Vienna be or- 
ganized cooperatively, under the supervision of the 
Wholesale Society, which was accordingly done. 
Thus the Wholesale Society was given charge of the 
victualing of 575,000 families in Vienna. Distribut- 
ing centers were opened in the larger works, while 
the smaller factories simply assigned their workers 
to neighboring cooperative stores. Naturally, the 
Wholesale had some difficulty in adapting itself to this 
sudden enlargement of business, but succeeded. As an 
illustration, it took over sixteen private baking plants 
as annexes to the big modern plant of the local co- 
operative bakery. Small wonder, then, that its in- 
crease in trade during 1916 was at the rate of y^) 
per cent, as against a 13 per cent increase the year 
before. In membership there was the same increase 
as in other countries; in 1914 the Central Union of 
Austrian Distributive Societies reported 298,605 in- 
dividuals affiliated with it through the local societies, 
as compared to 367,538 in 1917. The present status 
of these same societies is now unknown, for the rea- 
son that there has been the same disruption in the co- 
operative movement in Austria as there has been in the 
political organization. These societies had included 
Czechs, Slovaks, and other nationalities which, since 
the armistice, have broken away from the German- 



136 CONSUMERS^ COOPERATION 

Austrian societies and united into separate national 
groups. Glowing reports have been rendered of the 
rapid development of the cooperative movement in 
the Czecho-Slovak Republic, but in its case, naturally, 
there is no past with which to make comparisons. 

In Hungary the Wholesale had, in 191 5, established 
four new warehouses, each in a provincial center, and 
reported an increase in turnover at the rate of 50 per 
cent. In 19 17 it did a business of nearly 88,000,000 
kroner, as compared to slightly more than 30,000,000 
in 19 14, almost triple. How the Hungarian Whole- 
sale prospered during the war period may be judged 
from the fact that it contributed $200,000 toward the 
establishment of a cooperative university in Budapest. 
Few other institutions in the country were feeling 
flush enough to assist education to that extent. From 
1 9 14 to 191 7 the Wholesale added 470 societies to its 
constituency, while its total individual membership 
was about 300,000. 

As in Austria, so in Hungary, too, the cooperative 
movement has been strongly affected by the political 
situation. A recent dispatch reports that the Bol- 
shevist Communist Government, with its program of 
nationalization, has expropriated the Hungarian 
Wholesale and turned it into a government institution, 
thus destroying its cooperative character temporarily, 
at least. But this is not likely to do more than 
check its development for the time being, and 
when normal conditions are reestablished, whatever 
the form of government adopted may be, the Whole- 
sale will undoubtedly continue its onward march. 

As already stated, cooperation had suffered in 
France because of the actual invasion by German 
armies, but in spite of that fact the French Whole- 
sale resfistered a tremendous increase in its business. 



COOPERATION DURING THE WAR 1 37 

In the year ending July, 191 5, corresponding exactly 
with the first war year, it did a business of 9,000,000 
francs ; a little less than $2,000,000. During the year 
ending July, 19 18, its sales amounted to 42,000,000 
francs, nearly double the trade of the year previous. 
Much of this increase has been due to the friendly at- 
titude of the French Government toward cooperative 
enterprises, which appointed Albert Thomas, one of 
the most prominent of the cooperative leaders, Min- 
ister of Munitions, and encouraged him to establish 
cooperative societies wherever they could be of benefit 
to the munitions workers and the soldiers. As an 
instance, the army canteens were all put on a co- 
operative basis, as nearly as that was possible under the 
circumstances, and placed under the supervision of 
the Wholesale Society. 

I shall now consider briefly a few of the neu- 
tral countries, where development has been no less 
marked. 

In Switzerland the Wholesale Society did a busi- 
ness of a little over 45,000,000 francs in 1914. Last 
year, in 1918, this same institution had a turnover of 
nearly 130,000,000; almost triple. In 191 5 the mem- 
bership of the afifiliated societies stood at 287,704. 
Two years later they had increased to 324,948. As 
there are only 900,000 families in Switzerland, and 
each cooperative society member represents a family, it 
will be seen that over a third of the population is in- 
volved. During the war the Wholesale, again as the 
result of a boycott, established the biggest flour mill 
in Switzerland, with a weekly output of forty-two 
carloads of flour. There has also been an extensive 
purchasing of land for the purpose of agricultural 
production, for in Switzerland the so-called agricul- 
tural cooperative societies are bitterly opposed to the 



138 consumers' cooperation 

consumers' societies and discriminate in favor of the 
private dealers in wholesale farm produce. 

Sweden's Wholesale Society did a business in 19 14 
of 9,900,000 kroner. In 19 17 this had more than 
doubled, and stood at 21,800,000 kroner. In that 
same period the members affiliated to the Wholesale 
through their local societies increased from 111,000 to 
177,000, The Swedish Wholesale was the only imi- 
porter of American bacon after the armistice, none of 
the private dealers daring to undertake the risk. 

Norway's cooperative federation was weak in 1914; 
only 3,200 members were affiliated. But in 191 7 this 
number had increased to 60,000. In 1914 the Whole- 
sale's trade was 3,000,000 kroner. In 191 7 it was 
over 8,000,000. 

On June i, 1919, the Union of Dutch Workers' Co- 
operative Societies reported a membership of 48,768, 
as compared to 42,449 a year before. In 19 14 this 
organization, which is only one of three unions of 
consumers' societies, had a membership of 26,695. 
Which means that this organization doubled its mem- 
bership during the war. 

During 191 8 the four northern countries, Norway, 
Sweden, Denmark, and Finland, cooperated in the 
establishment of an international wholesale society, 
which began at once an importing business for the Co- 
operators of the four countries affiliated, with head- 
quarters in Copenhagen. 

Russia I have left to the last; so extensively has co- 
operation developed there that the Russian movement 
stands apart from the movements in all the other Eu- 
ropean countries. It constitutes to-day practically the 
economic and industrial system of all that part of 
Russia under Soviet rule. 

Various distinct causes contributed to this abnormal 



COOPERATION DURING THE WAR 1 39 

development. In the early years of the war, even 
under the autocratic regime, the cooperative societies 
attracted wide attention by their ability to handle the 
food problems, not only for the civil population, but 
for the armies at the front. The government, whose 
administrative machinery proved entirely inadequate 
for this function, was compelled to assign various 
social organizations to this task, such as the zemstvos, 
the federation of municipalities, and similar bodies. 
Among these were the cooperatives, and they proved 
themselves the most efficient. In the exercise of this 
public function of food supply they waxed strong. 

Then came the revolution. 

" On what basis will the economic organization of 
the new Russia be founded?" a correspondent asked 
the Premier, Alexander Kerensky, as reported by the 
New York Vorwdrts, in New York City, whose editor, 
Abraham Cahan, has always been a bitter opponent of 
cooperation. 

'' Study our cooperative organizations," replied the 
Premier, '' and you will know. The basis is already 
there." 

In the Kerensky Cabinet the Minister of Trade and 
Commerce, the Assistant Minister of Supplies, the 
Assistant Minister of Labor, the Minister of Posts and 
Telegraphs and the Minister of Public Relief were all 
appointed on account of their experience as leaders in 
the cooperative movement. 

During Kerensky's regime cooperation made rapid 
strides ahead, for every encouragement was given it. 
During 191 8 there were about 20,000 consumers' so- 
cieties throughout the country, with a membership 
of about 15,000,000 heads of families. 

The trade done by the Wholesale Society, in Mos- 
cow, though it covers only a part of the field, gives 



140 CONSUMERS COOPERATION 

some idea of the rapid growth. In 19 13 it did a busi- 
ness of only $4,000,000, less than the Wholesale of 
little Finland was doing. The first year of the war 
showed an increase of only a little over a million. 
But during 19 15 this turnover was more than doubled, 
rising to $12,500,000. In 1916 the volume of trade 
made a flying leap up to $45,000,000, bringing Russia 
up past Germany, third in order, after England and 
Scotland. In 1917 the sales rose to $75,000,000. 
Last year, during 1918, its turnover was 2,000,000,000 
rubles, which would be a billion dollars at the normal 
rate of exchange, but is now equal to about $400,000,- 
000. 

No less impressive are the figures for the central 
bank of the Russian movement; the Moscow Narodni 
Bank. This institution deserves special mention. 

Unlike the bank of the English Cooperative Whole- 
sale Society, the Narodni Bank is a separate establish- 
ment. In 1 91 2 it was founded on much the same 
basis as a private bank, with this important difference : 
that only cooperative societies could buy its shares 
of stock, or make deposits with it, while the bank it- 
self only made loans or granted credit to cooperative 
societies. 

In 19 1 3, when it had been in business only a year, 
the Narodni Bank had a turnover of $28,000,000. 
This doubled in 19 14. In 191 5 the turnover doubled 
again, rising to $120,000,000. In 1916 it mounted 
to over a billion rubles. And then came the big leap ; 
up to nearly six bilHon rubles, over a billion dollars, at 
the present rate of exchange. 

When the Bolsheviki came into power the leaders 
of the cooperative organizations were decidedly op- 
posed, and voiced their opposition so strongly that 
many of them were arrested and the Narodni Bank 



COOPERATION DURING THE WAR I4I 

was in the hands of the Red Guards for several weeks. 
This opposition has since died down to a somewhat 
sullen '* neutrality," though it cannot be denied that 
the same old opposition is still there. The Soviet has 
the armed forces of the country and the jails behind it. 

But, as Lenin found out very soon, the Soviet it- 
self was economically dependent on the cooperative 
movement. The factory committees which attempted 
to carry on the industrial plants from which the Soviet 
had driven the private owners proved dismal failures. 
The regional committees, based on a somewhat broader 
class foundation, were no more successful. So the 
factories were turned over to the well-organized con- 
sumers' societies, already operating a number of such 
establishments. The local food distributing commit- 
tees established by the Soviets proved hardly more 
competent, and again the cooperatives were appealed 
to. 

Lenin found that he must compromise with the Co- 
operators. Indeed, his whole scheme of industrial 
organization must be decidedly modified from his mix- 
ture of state Socialism and Syndicalism, in the direc- 
tion of practical cooperation. The Red Guards were 
taken out of the premises of the Narodni Bank and 
that institution was allowed its full independence again, 
though every other bank in the country was taken over 
by the Soviet. Special laws were passed favoring 
the cooperative enterprises. It was not till the latter 
part of 1 918 that the Narodni Bank was finally " na- 
tionalized," but this was really in the nature of a com- 
promise, for this action has in no substantial detail 
affected the independence of the institution, which con- 
tinues business under its old Board of Directors, whose 
decisions are only nominally subject to the approval of 
the Banking Commissars of the Soviet. 



142 CONSUMERS COOPERATION 

'' Lenin himself was present at the conference at 
which this compromise was affected," one of the bank's 
directors told me. '' ' You know,' he said to us, ' I 
never compromise.' He looked us straight in the eye, 
then a smile broke out about his mouth, and he added, 
' Except with you cooperators.' " 

To-day, according to statistics published in the Rus- 
sian Cooperator for April, 19 19, the official organ of 
the Russian cooperative office in London, the Central 
Union of Russian Consumers' Societies comprises, 
within Central Russia, 244 cooperative unions, num- 
bering 8,876,263 individual members, representing 
36,000,000 persons, representing 48 per cent of the 
total population of the territory under consideration. 
Another 15,000,000 persons are further served by the 
cooperative institutions, making altogether over 51,- 
000,000 persons out of a total population of 76,- 
000,000. 

The same article in which these figures are quoted 
then goes on to describe the w^orking basis on which 
the Soviet Government and the cooperative organiza- 
tion cooperate in distributing the foodstuffs among 
the population. 

The Central Soviet in Moscow controls the food 
supply. Every month the central cooperative organ- 
ization in Moscow, the Central Union (or Wholesale 
Society), informs the Soviet of the number of con- 
sumers its constituent societies have supplied in the 
different provinces. This gives the proportion of the 
population procuring supplies from the cooperatives. 
Figuring on this basis, the Soviet turns over to the 
Central Cooperative Union a corresponding percentage 
of the goods to be distributed to the people in those dis- 
tricts. The rest is handed over to the food committees 
of the local Soviets, for there is now no private trade 



COOPERATION DURING THE WAR I43 

in Central Russia. In August and July, 19 18, the 
Soviet Government turned over 65 per cent of its 
food supplies for distribution to the Central Coopera- 
tive Union. In sixteen of the thirty-seven govern- 
ments, or provinces, involved, the cooperatives were 
assigned the task of distribution exclusively. It will 
thus be seen that the cooperative system is now fast 
becoming universal in Central Russia ; that unless out- 
side interference should divert natural tendencies, co- 
operation will soon control the economic life of the 
country entirely. 

Already before the Bolsheviki came into power the 
Central Union of Russian Cooperative Societies had 
established a branch in London. A few months ago 
a similar office was established in New York City, 
where it covers a Whole floor of a modern downtown 
office building. The purpose of this agency, known 
officially as the American Committee of the Russian 
Cooperative Unions, is to persuade the United States 
Government to permit trade between American manu- 
facturers and the cooperatives of Soviet Russia. 
Through this office heavy purchases had already been 
made for shipment to the Siberian cooperative socie- 
ties. And now, at the present writing, comes the 
news that the United States Government has sold to 
this committee meat and clothing from its surplus 
army supplies for shipment, presumably to Moscow, 
to the value of $15,000,000. 

I think I have presented enough dry figures and facts 
to convince the most skeptical that consumers' coopera- 
tion has now become an economic force throughout 
all of Europe which must seriously be considered as 
a possible, even a probable, successor to private trade 
and industry, in the natural course of that evolu- 
tion which makes for the progress of civilization. 



144 CONSUMERS COOPERATION 

Continuing its onward march, not at the rate with 
which it has advanced during the five years of the 
war, but at the normal speed with which it was travel- 
ing before the war, it must inevitably acquire a domi- 
nating position in world industry within a very few 
years. 

Truly, efforts may indeed be made by the support- 
ers of the present order to check its course, to sup- 
press it. There are marked indications of such a con- 
certed movement on the part of large industrial groups 
in Great Britain at the present time. But such ef- 
forts have always failed in the past, and there is no 
reason to suppose that the British Cooperators, repre- 
senting almost a third of the population, and with a 
mighty economic weapon in their hands, have not 
the capacity or the strength to meet each move m^ade 
against them, step by step. Capitalism has never yet 
struck cooperation one telling blow. Indeed, capital- 
ism, at the present time, has more reason than ever to 
tread softly over the toes of the masses. Never, at 
any time during the past, has it stood in such fear of 
that danger which it chooses to call Bolshevism. Nor 
can there be any doubt that if, by legislative means, 
the capitalist class did succeed in blocking the course 
of natural evolution, which in industry is cooperation 
itself, there could be no other result than — Bolshe- 
vism. 



CHAPTER XII 

COOPERATION IN THE UNITED STATES 

To the practical American, assuming that he has 
read the foregoing outHne of the international co- 
operative movement, the question will at once arise: 
how does this affect us? Are we to expect extensive 
cooperative organization in this country ? 

To which, of course, there is no decided answer. 
Studying the facts as they are at present, both at home 
and abroad, we can only attempt to present the basis 
for speculation not entirely woven out of dreams and 
idealistic theories. But these facts are worth study- 
ing. There is enough material available. 

As a matter of fact, cooperation appeared in this 
country as early as in any of the Continental countries, 
and before it appeared in Russia, where it has since 
developed so remarkably. Nor can it be said that it 
has failed here more than elsewhere; rather, it has 
languished, as though waiting for the conditions 
propitious for its growth. Again and again waves of 
enthusiasm for cooperation have swept over sections 
of the country, to subside again, though never to re- 
cede entirely. So it was in the older countries, too. 
Indeed, it may be said that in the early attempts at or- 
ganization in this country more of a social spirit was 
shown among the people concerned : there was less 
tendency toward local isolation. For the local societies 
federated before they had attained a firm basis as 
units. 

As far back as 1844 a tailor in Boston, John G. 

145 



146 consumers' cooperation 

Kaulback, organized a cooperative buying club which, 
a year later, became the first cooperative society about 
which was formed a federation known as the Work- 
ingmen's Protective Union. In 1849 this organiza- 
tion changed its name to the New England Protective 
Union, by which time it comprised over a hundred divi- 
sions, as the local societies were called, 83 of which 
reported a membership of 5,109, with working capital 
amounting to more than $70,000 and sales consider- 
ably over half a million a year. Within the next three 
years the number of local divisions had increased to 
403, of which 67 reported a capital stock of a quarter 
of a million dollars. 

Then came internal quarrels, followed by a split and 
the organization of the American Protective Union. 
This latter organization also developed with remark- 
able rapidity, until in 1857 its local stores were doing 
a yearly business of $300,000 throughout ten states, 
most of them in Massachusetts. Altogether as many 
as seven hundred stores were established throughout 
New England and were scattered as far as Illinois and 
Canada. Some few of them survive to this day. 

But shortly before the Civil War a marked decline 
set in. Whether the organization might later have 
picked up again is doubtful, but at any rate when the 
Civil War broke out it went completely to pieces 
largely through the enlistment of its members. 

Its temporary success was probably due to the cen- 
tralization which marked its form of organization, 
without which this early attempt would have been 
little more noticed than similar attempts in other 
countries. But against the advantages of federation 
were set various handicaps. First, the movement tied 
itself down with outside matters, notably prohibition. 
All members were obliged to pledge themselves not 



COOPERATION IN THE UNITED STATES I47 

to touch alcoholic liquors, which limited its develop- 
ment to people of this way of thinking. This alone 
might account for ultimate failure, for no cooperative 
movement has ever succeeded which has weighted it- 
self down with issues not strictly pertaining to co- 
operation itself. 

Nor were these early stores conducted on Rochdale 
principles. Goods were sold at as near cost as pos- 
sible, a practice which experience has shown to be 
impracticable. Finally, the organization also under- 
took to judge the ''moral character" of all appli- 
cants for membership. Modern cooperation does not 
attempt to set up standards for personal conduct. 

The next wave of cooperation which rose, after the 
Civil War, swept over a much wider territory; from 
Maine down to Texas and westward to the foot of the 
Rockies, though it, too, had its inception in New Eng- 
land. 

During the early seventies the Grangers, more prop- 
erly the Patrons of Husbandry, a farmers' order, es- 
tablished a number of local cooperative stores, and to 
this day the grangers' stores are not unknown in the 
country. I shall not dwell on their cooperative efforts 
for, even where they have carried them out on the true 
Rochdale principles, their cooperation has always been 
incidental to other interests. They have never consti- 
tuted any real cooperative movement and would not 
be likely to join one. Theirs is a purely utilitarian 
manifestation and without any potential possibilities. 

But it was the local enterprises of these early 
Grangers which inspired a truly cooperative organiza- 
tion; the Sovereigns of Industry, founded in 1874, and 
open to all persons, regardless of occupation. 

The expressed purpose of the order, as indicated in 
its constitution, was to check, by peaceful means, the 



148 consumers' cooperation 

advance of predatory capitalism and to establish an 
industrial system based on equity. Reading their 
literature at this day, with a full knowledge of the 
trend of the modern movement abroad, it is surprising 
what an advanced stand the leaders of this movement 
took. At the time they were, in spirit, far ahead of 
the Cooperators of Europe, with the possible exception 
of that group supporting the English Wholesale So- 
ciety. 

The Sovereigns spread over the states of the Atlantic 
seaboard, from Maine down to Maryland, though they 
continued being most numerous in the North. Like 
the earlier Protective Union, the organization com- 
prised local groups, known as " councils," each of 
which engaged in cooperative buying. Some never 
developed beyond the stage of buying clubs, which 
elected buying agents, who bought on weekly orders. 
But about half of the councils eventually opened 
stores. 

The system on which they w^orked was rather pe- 
culiar, though quite democratic in form and spirit. 
The local councils invited loans from their individual 
members, from each according to his means. This 
money was utilized as the working capital of the en- 
terprise. Where possible, several neighboring coun- 
cils worked together in establishing a store, each coun- 
cil participating in the management in proportion to 
its investment, having one representative on the board 
of management for every hundred dollars, this dele- 
gate being elected by the council at large. A seven 
per cent, interest w^as paid on capital; the stores re- 
stricting their sales to members of the order and at 
prices calculated to allow a profit of about two and a 
half per cent. Half of this surplus w^ent to a sinking 
fund, the other half went into the treasuries of the 



COOPERATION IN THE UNITED STATES 1 49 

councils. Such was their plan in the beginning, but 
later the Rochdale plan was almost universally adopted. 

Within two years after its founding the order had 
. attained a membership of 30,000. The most notable 
store established in connection with this organization 
was the enterprise founded by the councils in Spring- 
field, Mass., whose members numbered 3,000 and 
whose sales in 1876 amounted to $135,000. But its 
prosperity was short-lived, and finally, in 1879, it 
failed, the chief cause of failure obviously being bad 
business management. As an instance, when the 
monthly trade of the store amounted to about $5,000, 
two clerks and one team for delivery were found suf- 
ficient; when this trade had been merely doubled, ten 
clerks and six teams were employed. Again, bad 
judgment was shown in buying, a lot of clothes and 
hats of fashionable cut being put in stock, with the re- 
sult that they had to be sold later at a big loss. 

The decline of the Sovereigns was as rapid as their 
rise. By the end of the seventies they had practically 
disappeared, though some of their stores survived as 
independent units. 

Meanwhile, organized labor, in the form of the 
Knights of Labor, had also taken up the cause of co- 
operation. The leaders of this organization seem to 
have had a full appreciation of the broad, social sig- 
nificance of cooperation. But unfortunately the 
Knights were primarily a labor union, and as already 
indicated, cooperation tolerates no matrimony. In 
double harness it never thrives, no matter how sympa- 
thetic a mate it may have. The Knights established 
and supported many stores throughout the country, 
extending them as far West as Kansas. But when 
the national organization collapsed, the enterprises it 
had initiated mostly ceased with it. 



150 CONSUMERS COOPERATION 

During the nineties and the early years of the new 
century cooperation seemed dead in the United States. 
Here and there might be found some isolated store, 
organized by immigrants, who knew the movement 
from home. The few big enterprises surviving from 
the early movements were purely commercial in spirit 
and continued on the Rochdale plan from habit rather 
than from any feeling of idealism. Nowhere, during 
this period, was there any sign of an expansive propa- 
ganda with social ideals, with a general program. 

Then, around the beginning of the century, coopera- 
tive stores began appearing in California in the rural 
districts. At first these isolated societies did not ap- 
pear in any way animated by idealism. The rank and 
file seemed inspired by no other motive than economy. 
But when some dozens of these societies were flourish- 
ing, certain leading spirits organized the '' Rochdale 
Wholesale Company," a sort of a central purchasing 
agency, with headquarters in San Francisco. Even- 
tually nearly a hundred stores were connected with 
this central institution, though it does not appear to 
have been in the nature of a real federation. For a 
while there was some discussion over a plan whereby 
the management of the local stores should proceed 
from the one head, on the principle of the modern chain 
stores. There is, apparently, something in this idea of 
centralization that appeals to the American character, 
for centralization had been a feature of the earlier 
New England movements. 

But before any general plan could be considered 
these California stores began failing, one after another, 
or in bunches, in fact. A general decline set in and 
finally, about eight or nine years ago, low-water mark 
was reached with only about twenty stores in existence 
in the state. 



COOPERATION IN THE UNITED STATES I5I 

'' The cause of failure," writes Ernest O. F. Ames, 
one of the leaders and president of the Pacific Co- 
operative League, an existing organization, " was lack 
of business management, extension of credit, lack of 
educational work, absence of auditing or any system- 
atic bookkeeping — all due to inexperience. The 
stores succeeded at first because, up to fifteen years 
ago, almost any kind of business could succeed in Cali- 
fornia. In the country towns, where the Rochdale 
stores were located, the farming population was a 
growing and a prosperous one." 

The present Pacific Cooperative League, incorpo- 
rated in 191 3, represents an effort to save the surviv- 
ing remnants of the movement and to promote it on a 
sounder basis. From 191 3 there has been a gradual 
but healthy progress in the business transacted. 
Already some of the buying clubs have opened stores. 
Most promising is the intelligent character of the 
leadership. 

Strong emphasis is put on education; on imparting 
to the rank and file a practical and theoretical knowl- 
edge of cooperation, without which no movement can 
hope to attain success. 

Another general movement was started in the 
Northwest, some ten or fifteen years ago, centering 
about Minneapolis, Minn., where a propaganda society, 
known as the Right Relationship League, attempted 
to create a federation. This stimulus was entirely 
from private individuals and was by them financed. 
The League sent organizers out over the surrounding 
territory and organized quite a number of cooperative 
societies in the rural districts and the larger towns. 
An organ. Cooperation^ was published to support these 
efforts and to spread a knowledge of cooperative prin- 
ciples among the people. The result was that several 



15^ CONSUMERS COOPERATION 

hundred stores were actually established in this section, 
most of which are still prospering. 

But only four years ago the Right Relationship 
League gave up its efforts, discouraged by lack of real 
success. Apparently it had not found the material of 
which social movements are built. At any rate, the 
store societies showed no ambition beyond local suc- 
cess. The several efforts made toward federating 
them were absolutely futile. Apparently, like the 
grange stores, the members were composed of farmers 
emphasizing selling, rather than buying. Unfortu- 
nately, too, the League attempted to straddle two 
steeds that will not pull together : Consumers' Cooper- 
ation and agricultural cooperation. 

In 1907 there began, in New York City, what pres- 
ently became a very self-conscious movement, pros- 
pering very little in the city itself, but spreading the 
idea over surrounding territory. In that year a small 
society was founded in the Bronx section of the city, 
composed only of some dozens of members. Having 
opened its store with a capital of less than a hundred 
dollars, just before the panic, it failed. Nevertheless, 
one of the members, Hyman Cohn, a Jewish salesman 
with the spirit of the ancient prophets, carried the idea 
down into the Jewish East Side. Organizing the Co- 
operative League, little more than a fictitious organiza- 
tion in the beginning, he carried on a tireless propa- 
ganda for years, largely alone; often he was the only 
one to answer the roll call at the " meetings " of the 
League. So persistent was his propaganda, how- 
ever, that he gradually became known to all the radical 
elements in the Jewish quarter as '' Cooperative 
Cohn." 

Persistence brought its due results. In 191 1 the 
Cooperative League had some three hundred dollars 



COOPERATION IN THE UNITED STATES 153 

in its treasury, though its active members numbered 
still less than a dozen. Then a hat store was opened 
in Delancey Street, a fairly large stock being procured 
on the credit of one of the members. 

The novelty of the enterprise seemed to appeal to 
the popular imagination on the East Side, for the hat 
store was a tremendous success. The League sud- 
denly found itself with quite a little capital on hand, 
for the purchasers would not bother to collect the re- 
bate on the purchase of a hat or two. The enthusiasm 
of Cohn and his little group was fired to white heat 
by this initial success — with the inevitable result. 
The second-hand machinery of a small hat factory was 
purchased, " on terms," of course, and the Cooperative 
League embarked on cooperative production. At least 
it had the distinction of establishing the first con- 
sumers' cooperative productive plant in this country. 

But the basic business principle of consumers' co- 
operative production is to establish your factory only 
when the market for its output has been organized. 
The members of the League numbered only some three 
hundred, and each of those would want no more than 
one or two hats a year. The factory, small though it 
was, occupying a loft, must turn out some hundreds 
of thousands of hats a year to make it pay its own 
upkeep. 

To meet this situation three other hat stores were 
opened, and each store added a " gent's furnishing " 
department to its hats. But what active sympathy 
there was in the Jewish quarter for the League had 
concentrated on the first store in Delancey Street. 
The other stores could not be made to pay expenses. 
The original store continued to prosper, and for over 
a year carried on its back the losses from the other 
stores and the factory. 



154 CONSUMERS COOPERATION 

Eventually the organizers realized their blunder and 
shortened sail rather skillfully, until the factory and 
the three losing stores were disposed of. This con- 
traction of enterprise, however, had its natural influ- 
ence on the people : added to it was the bitter oppo- 
sition of the Jewish Socialist daily, Vorzvcirts, whose 
editor belonged to the old school of Socialism and 
feared this diversion of radical energy into other chan- 
nels. New members ceased applying. Finally the 
League was reorganized into the present Industrial 
and Agricultural Cooperative Association, which owns 
and operates two restaurants, two boarding houses, and 
a butcher shop, its yearly pay roll amounting to about 
twenty thousand dollars a year. Up to the present it 
has been showing all the signs of success. 

I have given the above organization rather more 
space than it seems to deserve, but it had a lasting in- 
fluence which spread far from its source. 

The Cooperative League, though never possessed of 
other funds than were subscribed by the dues of its 
members or w^ere taken from its early profits, was 
thoroughly modern in its viewpoint and spirit. 
Moreover, it carried on a propaganda away from its 
own immediate vicinity from which it could hope for 
no immediate results, much less benefits. As an in- 
stance, it sent a delegate to the National Socialist Con- 
vention, held in Indianapolis in 1912, with the 
result that this body indorsed the cooperative move- 
ment and appointed a special committee to study 
it. Henceforward all active opposition on the part 
of Socialists was silenced, and even the Vorwarts 
was reduced to a merely passive resistance. The 
national committee of the Socialist party then 
established a bureau for information on coopera- 
tion in Chicago, and though the information here 



COOPERATION IN THE UNITED STATES 1 55 

dispensed had all the earmarks of the early Christian 
Socialist literature on the subject, it did lead to many 
cooperative societies being organized all over the coun- 
try by Socialists. Aside from this, the Cooperative 
League published many pamphlets and leaflets, in Eng- 
lish as well as in Yiddish, and these were productive of 
some concrete results. Many of the cooperative socie- 
ties in New Jersey were indirectly the offspring of the 
League. 

The Cooperative League was undoubtedly the first 
democratic cooperative organization to carry on a gen- 
eral propaganda in this country. 

From it, too, though indirectly, through individuals 
who had been active in its efforts, sprang the Con- 
sumers' Cooperative Union of New Jersey, which 
founded what is now the only organ of Consumers' 
Cooperation in this country. The Union was an at- 
tempt to establish a cooperative union, such as those 
existing in European countries. But it was only an 
embryo. Less than half a dozen organizations sup- 
ported it as members ; there was a continuous deficit in 
the publication of the Cooperative Consumer, most of 
which the printer stood. 

Finally, in 191 6, there was organized the Co- 
operative League of America, a propaganda body 
backed by private individuals, but with its doors open 
to cooperative societies on a federative basis. 

This organization has since developed as the back- 
bone of the propaganda for cooperation in this coun- 
try. It has had a powerful influence, not only in 
stimulating with its literature the organization of new 
societies, but in bringing the existing societies together 
into a national, cohesive body, conscious of its 
own significance and ultimate aims. Its president, 
Dr. James P. Warbasse, may rightfully be regarded as 



156 consumers' cooperation 

the American Vansittart Neale, with the important ex- 
ception that he accepts the lessons taught by the past 
experience of cooperation, and does not attempt to im- 
pose artificial theories on the budding American move- 
ment. 

The Cooperative League of America publishes an 
enormous amount of literature which it sends out freely 
over the whole country. It has made it possible for 
societies to obtain standardized information. It serves 
as a center to which appeals may be made for help 
and guidance. Its educational work fills a need never 
before supplied in this country. It functionates as a 
central union. 

I come now to the recent material development of 
the cooperative movement in this country, no less re- 
markable than that of the European countries, in pro- 
portion, considering the degree to which we have been 
affected by the great war. 

I have already referred to the comparatively slight 
manifestations of the cooperative spirit in California 
and the Eastern states, and the more material develop- 
ment in the Northwest, as representing the situation 
in this country before the war. Properly I should 
also have mentioned the group of cooperative socie- 
ties organized in southern Illinois by the coal miners, 
the first of which were founded seven or eight years 
ago and fostered by the labor unions, largely through 
the personal interest of John H. Walker, president of 
the Illinois State Federation of Labor, and its secre- 
tary, Duncan McDonald. 

When the war broke out there were about two or 
three dozen of these local cooperative societies in 
southern Illinois. Some, through the patient persist- 
ence of their members, many of whom were Britishers 
who had had experience with cooperation in the coal- 



COOPERATION IN THE UNITED STATES 157 

mining regions of England, where British cooperation 
is strong, had attained a firm foundation and were 
prospering, saving their supporters a material reduc- 
tion in living expenses. 

Then came the rise in the cost of living, brought on 
by war conditions, and, to a very much smaller degree, 
of course, the same thing happened there that had hap- 
pened in England ; all over Europe. So long as their 
scant supplies lasted, these little stores maintained nor- 
mal prices. That was not for long, but it was long 
enough to teach the lesson. 

Since then the Illinois store societies have developed 
rapidly and have spread over into the neighboring 
states. Save for a few cases in which incompetence 
was markedly obvious, they have all prospered. There 
was scarcely one of them which was not returning at 
least an eight per cent, rebate on purchases to its mem- 
bers before the United States entered the war. Some 
developed the Belgian recreational idea, as in Staunton, 
where a clubhouse similar to Anseele's 0ns Huis, in 
Ghent, is part of the local society's string of enter- 
prises. The store occupies the ground floor of one of 
the most imposing buildings in the town, but upstairs 
are a dance hall, a movie theater, a restaurant, a buffet, 
and a reading room. 

Many of the societies in other towns have followed 
this example, notably in Danville, where the local so- 
ciety has several branches of its main store in various 
parts of the town and where the social spirit of the 
membership is almost entirely wrapped up with the 
society. Here, as in many of the other locaHties, a 
permanent women's committee visits from house to 
house, to '' carry the gospel of cooperation," and, as 
this committee once reported, " the less they know 
about it, the longer we stay." In Illinois, at least, the 



158 

women play an important part in the organization and 
through it exercise what they consider a power equal 
to political suffrage. 

At the present time there are about a hundred co- 
operative societies in this section of the country, cen- 
tering about Springfield, 111. The governor himself 
has become an enthusiastic member and, in a public 
speech, declared that it was his opinion that cooper- 
ative history and principles should be taught in the 
public schools. Of these local organizations about 
half have federated into the Central States Cooperative 
Society, which has established headquarters in Spring- 
field and opened an ofiice and a warehouse in East 
St. Louis, acting as wholesale society to the constituent 
societies. 

Of more recent development is the movement in 
western Pennsylvania, centering about Pittsburgh. 
Here again it is the miners who have taken the initia- 
tive, but in this section they include many nationalities, 
especially Belgians from the Charleroi region, in Bel- 
gium, which is significant. But the majority are Ital- 
ians and Slavs. In one small town, Bentleyville, the 
local cooperative, doing a business of $200,000 a year, 
practically dominates the trade of the community, 
where local dealers had been charging an unusually 
high rate of profit for years. 

These Pennsylvania societies have also federated, in 
the Tri-State Cooperative Society, at the head of which 
was a particularly live young American college gradu- 
ate, Dalton T. Clarke, who gave up a law practice be- 
cause of his interest in the movement. He initiated 
the federation's enterprises by opening a warehouse in 
Monessen, from which goods were delivered to the 
local societies by motor trucks. Eight months ago 
this federation of consumers' societies had in its em- 



COOPERATION IN THE UNITED STATES 1 59 

ploy seven men. Since then another warehouse has 
been opened in Pittsburgh, and now they have thirty- 
five persons on the pay roll. 

The Tri-State Society has proceeded along rather 
peculiar lines, somewhat different from the orthodox 
methods of the European wholesale societies. Every 
effort has been made to bring in already existing so- 
cieties, and a large majority have responded by join- 
ing. But here and there, in communities where there 
were no cooperative stores, the Tri-State has opened 
retail branches of its wholesale business, using the 
store as a nucleus about which to develop a society 
later on. The society now has about twenty-three such 
dependent branches, about which a membership has not 
yet developed strong enough to take control of the 
branch. Organizers are also sent into the unorganized 
districts to stimulate the formation of local societies. 
As an instance, one of the Tri-State organizers went 
into the town of Charleroi, Pa., where there had been 
a cooperative society some years before. According 
to Holyoake no cooperative society has any chance of 
establishing a store in a community where one has al- 
ready failed, until the last survivor of the wrecked 
society is dead. Fortunately the Tri-State man did 
not know about this precept, and in twelve weeks he 
had organized a society with nearly 300 members and 
a capital of $18,000. This society is now running a 
big store successfully in Charleroi, under the guidance 
of the Tri-State. 

Farther north cooperation becomes more rural ; that 
is, the store societies are largely organized by farmers, 
sometimes in connection with their marketing associa- 
tions. It is in this prospering region, centering about 
Wisconsin, Minnesota, and the two Dakotas, that the 
Cooperative Wholesale Society of America (St. 



i6o consumers' cooperation 

Paul), the American Rochdale Union, the American 
Cooperative Association, the American Rochdale 
League, and the American Cooperative Organization 
Bureau operate. One of these organization bureaus 
reports having established a store every two weeks for 
the past six months. Another started shortly after 
the war broke out, with a capital of $7,000. In 191 8 
it had seventy-five branches in operation, with a paid-in 
capital of $700,000. It reports having recently begun 
manufacturing on the Rochdale plan. The broad, so- 
cial idealism of the cooperatives backed by the labor 
organizations seems not so pronounced in this section, 
but certainly this cannot be said of the officials of the 
Cooperative Wholesale Society of America, in St. 
Paul, though I am personally of the opinion that they 
are repeating the mistake of the Right Relationship 
League ; attempting to coordinate two elements which 
are not compatible. The Nonpartisan League out in 
that section has in operation a chain of some fifty or 
sixty stores, but they are not true to cooperative prin- 
ciple, the main object of the organization being politi- 
cal. 

Out around Puget Sound is where things cooperative 
happen overnight. There it is all a question of 
months. In June, 191 8, the local society in Seattle was 
organized, under the leadership of Carl Lunn, a young 
Swede with a dynamic personality, and it bought out 
a private store doing a business of $4,200 a month. 
Within a few months trade had developed to the rate 
of $7,000 a month. 

Lunn and his fellows were labor men, and the unions 
were behind them — unofficially, of course, as they 
had been in Illinois. They were pleased with this 
initial success. So they, as labor unions, bought out 
the entire South End Public Market, in which they es- 



COOPERATION IN THE UNITED STATES l6l 

tablished a general wholesale and retail meat business. 
Part of the premises was allotted to the cooperative 
grocery society, while some of the stalls were retained 
by the private dealers who had previously occupied 
them. 

During the next thirty weeks the combined turn- 
over of the cooperative society and the labor unions' 
meat business amounted to half a million dollars. The 
meat business alone soon rose to $70,000 a month. 
Recently the labor unions holding shares in the meat 
enterprise passed a resolution in favor of reorganizing 
on a truly Rochdale cooperative basis, with a view to 
amalgamating with the grocery society, this to be ac- 
complished through allotting, or selling, the shares to 
the individual members of the unions. When this has 
been done Seattle will have the biggest cooperative so- 
ciety in the United States, for the individual members 
of the unions concerned number many thousands. 

In another part of Seattle the plumbers and steam- 
fitters' union bought out a grocery store and soon were 
doing a big business, amounting to as much as $1,200 
a day during the big strike. Here, too, a resolution 
was passed in favor of reorganization on the Rochdale 
basis. 

The Puget Sound region is dotted with cooperatives, 
each possessed of the virile energy characteristic of the 
Seattle Cooperators. A federation has been formed 
in the Northwestern Cooperative Association, which 
has behind it the drive of all the labor elements of the 
state. " The Big Idea," they call it, and as such it is 
known to all, without further description. 

Some mention should be made of another coopera- 
tive enterprise established by the Seattle labor men, 
which has potential possibilities in it for the future of 
the movement. That is a loan association, the shares 



1 62 consumers' cooperation 

of which have been sold exclusively to labor unions and 
cooperative societies. If this develops along lines simi- 
lar to the Narodni Bank of Moscow, cooperation will 
indeed receive a powerful stimulus along the entire 
Pacific slope, for that will mean vast funds for the 
development of cooperative enterprises. The savings 
of the working classes will be diverted from the ordi- 
nary channels of capitalistic trade into the cooperative 
movement. 

Most of the cooperative activity is, undoubtedly, in 
the West and the Middle West. At least it is in those 
sections that the members get together and federate, 
showing enthusiasm for the movement not only be- 
cause of the saving it offers in the cost of living, but 
for the social idea it embodies. Nevertheless, there 
are some examples of successful cooperation farther 
east. A notable instance is that of the Into Cooper- 
ative Society, in Fitchburg, Mass. 

In 19 10 this society opened a grocer}^ store, which 
did a business of $20,000 that year. Now the society 
operates four grocery stores, a men's furnishing and 
shoe store, and a bakery, all of whose sales combined 
amounted to half a million dollars during 19 18. The 
society also operates a bank, which has assisted many 
struggling cooperatives with loans, notably a cooper- 
ative housing society in Brooklyn, N. Y. Recently 
the society took over a milk-distributing route and is 
now serving a thousand families a day. 

In Paterson, N. J., a cooperative bakery was or- 
ganized some years ago by the Jewish immigrants, who 
found difficulty in getting the particular kind of bread 
that suited their taste. But at that time the Purity 
Bakery, as the enterprise was called, was not run on 
strictly Rochdale principles. Instead of charging mar- 
ket prices and returning the profits to the purchasing 



COOPERATION IN THE UNITED STATES 1 63 

members, the society put the price of its bread at a 
Httle above cost and, if a surplus remained, that was 
devoted to some pubHc charity, or to strike funds. 

Along came the war and the high cost of living, and 
finally the fixing of the price of bread by the Federal 
Food Control Board. Bakers from all over the coun- 
try, it will be remembered, protested against the prices 
fixed by the government ; they would be ruined, many 
of them said, if they were compelled to sell their bread 
at so low a price. At about the same time that their 
telegrams were pouring into Mr. Hoover's office in 
Washington, the Purity Cooperative Bakery tele- 
graphed, but to this effect: if it must sell bread at the 
government price, the management would have ac- 
cumulating on its hands a surplus fund which it would 
not know how to dispose of ; it would be disobeying the 
by-laws of the society. In other words, the board of 
management complained of the prices set by the gov- 
ernment being too high. 

Naturally, no exception could be made in favor of 
one establishment, and so the Purity Bakery was left 
to solve the difficulty of having too much money as 
best it could. Washington was not disposed to sym- 
pathize. 

Then the management committee called a general 
meeting of the members and put the situation before 
them. The result was that a Rochdale constitution 
was adopted, the surplus was distributed among the 
members in proportion to their purchases and, hearing 
of this, so many new members enrolled that the Purity 
Bakery became one of the biggest baking establish- 
ments in Paterson. Since then two similar cooper- 
ative bakeries have been established in emulation of the 
success of the Purity in near-by communities; one in 
Newark, N. J., the other in Brownsville, a district of 



164 consumers' cooperation 

Brooklyn, N. Y., both of which bid fair soon to attain 
a size equal to the Paterson enterprise. 

The universal appeal of cooperation is illustrated in 
a very picturesque phase of the movement which has 
taken root down in Tampa, Fla., and neighboring 
towns. In 1914, after a prolonged strike of the work- 
ers in the cigar factories of that section, Gregorio 
Chavez, one of these Spanish speaking, or Latin, work- 
ers, as they call themselves, began agitating for com- 
munity stores. He knew nothing of Rochdale princi- 
ples, but he had conceived of the general idea. His 
efforts caused some dozens of the cigar workers to get 
together and start a small-store society, on the same 
scale and in the same way as the weavers of Rochdale 
had initiated their famous undertaking. A store was 
not even rented ; the goods were bought and distributed 
of evenings in the private house of one of the group. 
The initial capital subscribed was fifty dollars, while 
the society gave itself the optimistic name of El Pro- 
gresso. 

In the beginning of 19 17 there were seven of these 
small groups in West Tampa and Ybor City, with a 
membership of 450. By February, 1919, there were 
21 societies, with a membership of about 1,500, and 
about half of them were established in regular stores. 

But by this time> they began attracting the attention 
of the local retailers, who were beginning to suffer 
from this diversion of retail trade, amounting now to 
close on $70,000 a month. Under the leadership of 
the local representative of the Federal Food Control 
Board, one Jones, the retailers organized and began 
initiating a boycott of the cooperatives; they notified 
the wholesalers that they, the wholesalers, must refuse 
to sell to the cooperatives if they would continue to 
sell to the retail trade of the region. All but one, a 



COOPERATION IN THE UNITED STATES 1 65 

Latin wholesaler, Guerra, complied. Guerra, true to 
his name, refused to be dictated to, and proceeded to 
fight the ring with the government official at its head. 

The cooperatives, by this time loosely federated in 
a General Assembly of Cooperative Delegates, also 
took action and hired a lawyer. The latter, who for- 
tunately happened to be an honest man, suggested that 
the Cooperators save themselves the expense of litiga- 
tion by an appeal to public opinion, through the board 
of governors of the local chamber of commerce. This 
was done, and the case was brought before that body. 
It then developed that the president of the board was 
one of the very wholesalers who were boycotting the 
cooperatives. The members of the board were com- 
pletely puzzled ; they had never met such a case before. 
Naturally, they could enforce no decision, but the gen- 
eral feeling of the members of this body, representing 
private business though it did, seemed to be that the 
wholesalers were acting unfairly. The local press took 
the matter up, and finally the wholesalers agreed to 
resume trade relations with the cooperatives. 

But now Guerra, the wholesaler who had been dis- 
loyal to his trade associates, was made to feel the brunt 
of their displeasure. He had been appealing and writ- 
ing complaints to Washington and saying unpleasant 
things about his associates to local newspaper reporters. 
They began to boycott him; the jobbers refused him 
goods and the banks refused him credit. In retaliation 
he began court proceedings against the leader of the 
retailers, the food controller, and the cooperatives 
backed him up strongly. In a legal court, however, 
the cause of cooperation and the fighting merchant 
lost out. 

In their efforts to get assistance the Latin Cooper- 
ators, through their secretary, A. R. Hernandez, got 



1 66 consumers' cooperation 

in touch with the rest of the national movement of the 
country, more particularly with the Cooperative 
League of America, and began to discover that they 
were not wholly based on correct principles. Now 
they are reorganizing and preparing to establish a 
wholesale. Great quantities of the Cooperative 
League's literature hai^e been translated and published 
in Spanish and spread broadcast throughout the re- 
gion. Meanwhile the local societies now number 28 
and the membership has swelled to 1,700; which has 
always been the result of attempts to suppress co- 
operative enterprises. The American elements in 
Tampa are also aroused and, backed by the labor 
unions, an American organization has been formed, 
which publishes a fortnightly paper, The Cooperative 
World, half of which is in Spanish. 

In actual figures it is difficult to sum up the co- 
operative movement in the United States. Years ago 
the Department of Commerce and Labor in Washing- 
ton included cooperative enterprise in its statistics, but 
it has nothing now to indicate the scope of the present 
movement. Two years ago, shortly after it was 
founded, the Cooperative League of America, after a 
thorough canvass of the country, had five hundred so- 
cieties listed, many of which were later eliminated be- 
cause it was discovered that they had ceased to exist. 

Then came the indorsement of cooperation by the 
American Federation of Labor Convention, in 191 7, 
under the influence of the Illinois delegates. This un- 
doubtedly proved suggestive to many labor groups 
throughout the country. A year later, in the fall of 
1918, the first national convention of American Co- 
operative Societies was held in Springfield, III, and 
the success of this conference from the point of view 
of numbers alone proved a further stimulus. At the 



COOPERATION IN THE UNITED STATES 1 6/ 

convention was organized the National Cooperative 
Association, with Dahon T. Clarke, of the Tri-State 
Society, as president. With tremendous vigor, backed 
by the funds of the Tri-State, the National Association 
has set about organizing new societies from its head- 
quarters in Chicago. It has brought together the 
wholesale societies of California, Seattle, St. Paul 
and Springfield, and welded them together into a na- 
tional unit of the international movement, laying the 
foundation of a national wholesale society. Encour- 
aged by the economic advantages offered by the Na- 
tional Association, which is even now opening branches 
in New York City and Boston, new societies are easily 
stimulated into activity. 

The Cooperative League and the National Associa- 
tion, the one representing propaganda, the other the 
commercial aspect of the movement, now have listed 
over 3,000 American cooperative societies, all of which 
are undoubtedly in existence at the present moment. 
The 2,000 societies listed by the League practically all 
wrote in on their own initiative, showing that they 
were interested in the educational aspect of the co- 
operative movement. 

What the destiny of the American cooperative move- 
ment may be is open to discussion. Compared to such 
countries as Great Britain, Switzerland, Germany, Rus- 
sia, and a dozen other European states, we have com- 
paratively nothing to show, though it must be remem- 
bered that before the war Russia had even less than we 
have now. But whatever its future development, co- 
operation is in America to stay. For already it has 
passed the most difficult, the most trying, stage: the 
formation and establishment of the local societies. 
While these, when well managed, undoubtedly do 
benefit their members, it is only when they federate and 



1 68 consumers' cooperation 

pool their interests that the benefits become consider- 
able, in a material sense. It is exactly that which the 
American societies have been doing within the past 
two years. 



PART II 

COOPERATION AS A FACTOR IN THE 
SOCIAL REVOLUTION 



CHAPTER I 

LIMITING THE FIELD TO REVOLUTIONARY 
COOPERATION 

In the foregoing chapters I have outlined the gradual 
development of Consumers' Cooperation, from its 
nebulous beginnings a hundred years ago to its present 
status as a world-wide organization of over fifty mil- 
lion souls. I have attempted to place before the reader 
a simple record of what cooperation has so far 
achieved. 

Considering only the present dimensions of the co- 
operative movement, together with its normal rate of 
expansion, before the war, it must be obvious that what 
it has so far achieved is only a part, and perhaps only 
a very small part, of what it has yet to achieve. At 
the present moment there is nothing in sight which 
seriously threatens its further progress in the immedi- 
ate future. Even those who may regard it with preju- 
diced eyes cannot deny that it is destined to be a big 
factor in the industrial and social reconstruction which 
must follow the war. 

Utilizing the material before us as a basis, it cannot 
be altogether unprofitable to make a few constructive 
deductions regarding the influence that the cooperative 
movement will exercise in the future development of 
civilized human society. Certainly there is more than 
abstract interest in asking: how widely is this revo- 
lutionary system likely to expand ? What other social 
forces are there tending to check its progress? Is it 
an ally, or is it an enemy, of such tempestuous forces 

171 



172 CONSUMERS COOPERATION 

as are now sweeping over Russia and seem even to 
threaten other countries? Finally, assuming that it 
does eventually permeate all, or the greater part, of 
civilized society, how will it modify our present condi- 
tions of life? 

I have before remarked, and I must again emphasize, 
that most of the literature dealing with cooperation 
has led to confusion in determining the true character 
of the movement. Perhaps it may be presumptuous 
to set oneself up against the recognized authorities and 
exponents of the subject, but it is not necessarily su- 
perior wisdom which may lead one to disagree with 
previous opinions. Supplementary evidence may 
cause a revision of conclusions which were logical 
enough, considering the limited data on which they 
were based. I maintain that these supplementary data 
are at hand in the record of the more recent develop- 
ment of Consumers' Cooperation. 

I have already limited the field under consideration 
to what many authorities still consider only one phase 
of the subject: Consumers' Cooperation. In present- 
ing my reasons for doing so in more detail, I believe 
I shall also be helping in a clearer understanding of the 
essential characteristics of Consumers' Cooperation 
itself. 

As a rule cooperation, considered broadly, has been 
divided into four chief phases : Productive, Agricul- 
tural, Credit, and Distributive. It has generally been 
assumed that all these different forms of joint effort 
acted on some common principle, that their interests 
were mutual and that their ultimate purposes were 
identical. To this day, it must be remembered, repre- 
sentative societies of any of these groups are freely 
admitted into the International Cooperative Alliance. 
In those countries where cooperation is of compara- 



LIMITING THE FIELD 173 

tively recent origin, as in Finland and Ireland, the na- 
tional unions still include all these forms. 

This first assumption of a common interest between 
these various forms of joint effort had some justifica- 
tion in a time when inherent characteristics had not 
yet manifested themselves. All presented the attrac- 
tive feature of joint effort among men in humble life. 
All made their appeals in the name of economic justice 
for the toiling masses. On this sentimental basis there 
was a tendency toward coming together. 

Then, at different periods in the various countries, 
according to the degree of cooperative development 
which had been achieved, a silent disintegration began 
to take place. There was no open quarreling, but as 
the local organizations acquired size and strength, they 
seemed instinctively to realize that all were not birds of 
a feather, and a separate grouping of each form took 
place, each society seeking its kind. Not only was 
there no ill feeling behind this quiet process of re- 
arrangement, but mutual regret was the predominating 
sentiment. Some subtle economic law had been 
brought into operation. 

Dr. Hans Miiller, that critical student of cooper- 
ation, from whom I have already quoted so copiously, 
was one of the first to recognize this tendency as in- 
evitable and to ascribe it to a divergence of interests 
and fundamental principles. Says he, in his article on 
the International Cooperative Alliance, in the First 
Yearbook of that body (1910) : 

*' In a formal way one may regard the cooperative 
efforts of the various avocations and classes of society, 
and the organization which they create, as forming a 
united body and as branches springing from a single 
stock. But their relations to each other are only 
seeming and external. If we penetrate into the inner 



174 CONSUMERS COOPERATION 

kernel of the different societies that lie within the same 
legal shell, we find there not only economic principles 
and social aims and tendencies which differ widely, but 
are even opposed to each other — and logically viewed 
must exclude each other and come in conflict in the 
conduct of real life. Cooperation has ceased to be a 
movement which embraces a common social ideal and 
an identical interest. 

'' As a matter of fact, no country has been able to 
form a general federation which includes and furthers 
all branches and forms of cooperation. The so-called 
general unions of Germany, Austria, and elsewhere 
long ago ceased to be entitled to their name. They 
are, looked at clearly, just as much specialized unions 
as those whose titles declare them to be such (central 
union of distributive societies, of industrial societies, 
of agricultural societies, and so on). The unity of 
the cooperative movement, which its theorists and first 
promoters fifty years ago tried to bring into promi- 
nence by the establishment of general unions, has long 
since suffered shipwreck from the actual development 
of the cooperative movement." 

Unfortunately Dr. Miiller does not give the basis 
for these deductions. He points out an effect, but 
only generalizes as to the causes. 

Wherein, then, lies this difference between the inter- 
ests of men who proclaim the same ideals? 

The controversy attending the split between the con- 
sumers' cooperative societies and the representatives 
of one of these four groups, the Productive, or self- 
governing, workshops, has already been accorded suf- 
ficient detail in my narrative. The issue is now dead, 
lor as a movement the self-governing workshops have 
ceased to exist, except that there is a strong similarity 
Detween the theories on which their advocates based 



LIMITING THE FIELD 175 

them and those underlying the program of the modern 
Syndicahsts. That we shall consider later. For a 
comprehensive analysis of the Christian Socialist 
theories I will refer the reader to Mrs. Sidney Webb's 
(or Beatrice Potter's) work, " The Cooperative Move- 
ment in Great Britain," wherein, as far back as 1891, 
when the controversy Vv^as at its height, she fully justi- 
fied the consumers' societies in their rejection of the 
Christian Socialist doctrines, none the less convincingly 
because she was herself an outsider, holding views op- 
posed to both sides. This book I urgently recommend 
to those Americans who still associate cooperation with 
the defunct cooperage shops of Minneapolis and St. 
Paul and believe that American cooperation died with 
them. 

Agricultural cooperation, however, stands before us 
in a very different position. It is to-day a live, virile 
institution and in this country is making gigantic 
strides forward. Here, save for the possible excep- 
tion of Brazil, it has reached its highest degree of per- 
fection, in the fruit growers' associations of Califor- 
nia and the wheat growers' combines of the Northwest 
and Canada. Perhaps one of the best examples of 
this form of American cooperation may be found in 
the recently organized Dairymen's League of New 
York State, and to which I shall refer again later. 
Agricultural cooperation, however, has also experi- 
enced marked development in some of the European 
countries, notably in Russia and Ireland and Den- 
mark, though in some countries, as in England, Scot- 
land, and Belgium, it has so far shown little indication 
of progress. 

For the purpose of comparison let us sum up the 
essential characteristics of each of these two types of 
joint effort. 



176 consumers' cooperation 

First of all, the immediate purpose of Consumers' 
Cooperation is the production and supply of goods for 
the use of its own members primarily. To accom- 
plish this end the necessary machinery must be ac- 
quired and set in motion: stores, factories, land, etc. 
AH this property, acquired gradually, as it is needed 
to supply the increasing membership, is owned col- 
lectively by the members, each having an equal 
share. Social partnership takes the place of private 
ownership ; social profit takes the place of private 
profit. 

Again, in the management of all the operations of 
the property, each member shares equally. Each has 
a voice in the control. Finally, membership is open 
to all comers, regardless of sex, creed, race, or avoca- 
tion. The basis of the membership is a human being, 
pure and simple. Potentially membership includes all 
society — it is all-inclusive. Consumers' Cooperation 
is essentially a social movement, for the interests it 
represents permeate all society. 

An agricultural cooperative society consists of a 
number of farmers who combine in selling their prod- 
uce. Their purpose is to increase the financial returns 
from those sales, first, by reducing the charges of the 
middlemen. By pooling their sales they create a vol- 
ume of business big enough to justify special agencies 
of sale, over which they have full economic control. 
Secondly, where conditions permit, they endeavor to 
maintain a high level of prices for their goods by regu- 
lating the volume of their sales, through holding up 
shipments and storing their goods when there is a 
downward tendency in the market. In some cases, as 
with the Dairymen's League of New York, they may 
even hold up the supply entirely until their demands are 
complied with. Thus it will be seen that a farmers' 



LIMITING THE FIELD 177 

association is more truly deserving of the name " dis- 
tributive " than a consumers' society. 

For, as a matter of fact, cooperative action does not 
begin until the productive stage has been entirely 
passed. Going back to the beginning, the farmer, as 
a private individual and on his own personal initiative, 
invests his private capital in a certain amount of land, 
buys his own machinery and produces, sometimes en- 
tirely with hired labor, certain commodities destined 
to be sold on the ordinary speculative market. The 
land, the labor-saving machinery, and the produce, all 
are his private property. The unit of membership of 
a farmers' association is not a person, but a private 
business interest. Is that not borne out by the fact 
that the qualification for membership is the ownership 
of a productive plant representing a certain amount 
of invested capital? 

And while agricultural associations do sometimes 
eliminate the commissions of the middlemen by placing 
them on a salary basis, they do not eliminate private 
profit, for the goods are sold at as big a margin above 
the cost of production as possible, and this margin 
goes into the pocket of the original seller, the farmer. 
True, this margin is very often not more than a just 
return for the labor involved in the production of the 
goods, but the margin is not regulated on that basis. 
It is a purely speculative margin. Even personal su- 
pervision of the production of the goods marketed is 
not a required qualification for membership. Not a 
few of the members of the California fruit growers' 
associations are mere business men, possessed of no 
technical knowledge whatever, who have invested capi- 
tal in some hundreds or thousands of acres of fruit 
land, have placed a superintendent in charge, and enjoy 
substantial revenues from estates which they visit only 



178 consumers' cooperation 

once or twice a year. Whether such cases are typical 
or not is entirely irrelevant. Others, again, through 
the economic strength given them by the association, 
are able to hold their produce for a rise in the market 
and thus, by pure speculation, gain handsome profits 
which certainly have no relation to the amount of labor 
expended. A cooperative grain elevator is nothing 
more nor less than the machinery for joint speculation. 

Wherein does an agricultural cooperative association 
differ from those combinations of small manufacturers 
who attempt to raise profits by joint advertising and 
marketing and by controlling supply, until sometimes a 
trust is created? Wherein is the social character of an 
organization whose membership is strictly limited to 
men of one line of business? 

Nor need one seek far to discover concrete illustra- 
tions of this fundamental diversit}^ of interests be- 
tween the organized farm^ers and the organized con- 
sumers. Within the past two years the New York 
dairymen have, through their combination, raised the 
price of milk to the ultimate consumer from nine to 
fifteen cents a quart. I do not deny that previous to 
their organization the dairymen may have been receiv- 
ing too lovv^ a price for their milk to pay for actual 
labor. But the same power which they employed in 
raising their remuneration to a level in accordance with 
justice could also be employed in raising it still higher. 

Another notable illustration of the conflicting in- 
terests between the two forms of organization under 
consideration is the coffee growers' associations of 
Brazil. The Brazilian coffee planters first organized 
along the usual lines, then entered into a contract with 
the Brazilian Government whereby the latter built them 
warehouses in which they could store their coffee. So 
that the planter should not lose the interest on his idle 



LIMITING THE FIELD 179 

capital, the government advanced him money on it. 
Through this system of storage, " valorization 
scheme," as it was called, shipments could be so regu- 
lated that a steady level of high prices could be main- 
tained in the coffee markets of the whole world, the 
result being that among some millions of poor work- 
ingmen's families throughout Europe coffee became an 
almost unattainable luxury. 

Again, we have the instance of the wheat growers' 
association of western Canada who, at the beginning of 
the war, sent their representative to bargain with an?, 
agent of the British Government for a "just price" 
for wheat to the British public and the British armies! 
in France. The British Government's representative^ 
was horrified by the demands of the farmers' repre- 
sentative, j 

'' Have you no patriotism? " he demanded hotly. I 

'' I am not a Britisher myself," replied the farmers' i 
agent. " I am a citizen of the United States." Thisj 
was before the United States had entered the war.' 
The Canadian farmers obtained their price. 1 

In the same way the buyers of the British cooper-s 
ative wholesale societies were also held up for high \ 
prices. They quietly bowed their heads before a supe- 
rior power, but some months later it was announced 
that the English and Scottish wholesale societies had 
purchased ten thousand acres of wheat lands in Canada. 

But already before the war a realization of the situ- 
ation had been creeping in among the consumers' so- 
cieties, not only of Great Britain, but of the Continen- 
tal countries as well. To be sure, there are still ideal- 
ists in the movement who are deceived by outward 
appearances and call for " unity." Such an appeal 
was made not longer ago than in 19 13, at the last 
international cooperative congress, held in Glasgow. 



i8o consumers' cooperation 

In speaking on the question thus raised, a Swiss dele- 
gate, Herr Angst, said of the situation in Switzerland : 

'' All our agricultural societies have banded them- 
selves together into powerful peasant organizations 
and have acquired such strength that they control the 
highest authorities in our country, and if we were to 
express the wish that they should join our Interna- 
tional Cooperative Alliance we should at the best call 
forth a sympathetic smile at what would be regarded as 
weakness on our part and our suggestion would be 
sternly rejected. In my opinion the inclusion of the 
Swiss peasants' cooperative societies would weaken and 
maim the activity of our Alliance. The interests of 
the Swiss agricultural societies are diametrically op- 
posed to our interests. I do not understand what in- 
terests the Alliance could have in common with the 
agricultural societies. The Peasants' Union in Switz- 
erland is the bitterest enemy of our cooperative move- 
ment, and seeks to hinder our development in every 
possible way. This union fears that the consumers* 
societies will unfavorably influence the prices it has 
fixed, and, therefore, it seeks to suppress the formation 
of cooperative distributive societies. The Peasants' 
Union prefers to trade with private customers, for it 
is firmly convinced that the unorganized consumers can 
do less than the organized in opposition to its inter- 
ests. If the peasants' organization makes any profits 
it divides them according to the number of shares held 
by each member. . . ." 

Mr. Angst's words, of course, represent a situation 
which is only reached where both forms of organiza- 
tion have attained large dimensions, as is the case in 
Switzerland. Each side has acquired a large amount 
of economic power in the exercise of which it has 



LIMITING THE FIELD l8l 

come to realize, from actual experience, that there is 
a clash of interests. In a country like Russia where, 
though size has been attained, both movements are still 
young and have had little practical experience, no such 
realization has been reached and joint federation is 
still maintained. Yet it is significant that there is at 
present a bitter division among the members of the 
committee to America ; between those representing ag- 
ricultural societies and those representing consumers' 
societies, over the question whether the Koltchak gov- 
ernment should be recognized. It is characteristic that 
the agricultural societies should be in favor of Kolt- 
chak's reactionary tendencies. The same is true in 
Ireland, where the agricultural organizations, in the 
form of a joint wholesale, have full control of the re- 
cently developed consumers' movement and are able 
to fix the prices at which their produce shall pass into 
the hands of the consumers. 

Again and again the point is raised that the agri- 
cultural producers and the consumers are dependent 
on each other. But we are not discussing agricultural 
production — as such. I have been considering only 
the system by which it is carried on and how this sys- 
tem creates a special interest for those now directing 
the agricultural industries; the interest of private 
profit. The farmer as a worker we shall consider 
later. 

While all forms of enterprise based on private profit 
are no doubt dependent on the consumers of their 
products, the consumers are by no means dependent on 
them. Or, at least, the road to independence lies open 
before them. At one time the consumers' societies 
were dependent on the wholesale merchants. The 
wholesale societies have released them from this eco- 



1 82 consumers' cooperation 

nomic bondage completely, and they are not very far 
from having freed them from the private manufac- 
turers as well, in Great Britain, at least. 

When the British wholesale societies purchased their 
tea estates in Ceylon, they thereby acquired a certain 
degree of liberation from the tea planters' associations. 
At any rate, the latter dare no longer apply pressure, 
for the immediate result would be the acquisition of 
more tea land on the part of the cooperative organiza- 
tions. When the wheat growers of Canada showed 
themselves disposed to take advantage of the cooper- 
ative organizations by exercising their joint economic 
power over them, the cooperative organizations were 
not long in showing that they had in their hands an 
economic power vastly greater. Those ten thousand 
acres of wheat land will supply only an infinitesimal 
part of the wheat needed by the cooperative flour mills 
in England and Scotland. But that land constitutes 
an entering wedge ; it is nothing less than the point of 
the knife held against the breast of the capitalist pro- 
ducer of wheat. Against this threat he stands abso- 
lutely helpless. Those ten thousand acres can so 
easily be expanded into fifty thousand, into five hun- 
dred thousand. And cooperation can command labor 
where the capitalist producer cannot, for it can afford 
to pay higher wages. 

Will there, eventually, be a fight, a bitter life-and- 
death struggle? 

Or will the agricultural producer realize some day 
that he, too, is a consumer? 

There still remain a few words to be said regarding 
that fourth '' phase " of cooperation : mutual credit, 
but they need only be very few. Mutual, or cooper- 
ative, credit, as its name indicates, consists of a num- 
ber of individuals who join together to pool their sur- 



LIMITING THE FIELD 1 83 

plus savings with the purpose of eHminating the profits 
of the banker, or money lender. A credit society is 
only a cooperative bank, the profits of which are more 
or less equally divided between lenders and borrowers. 
The character of the society depends entirely on the 
character of the members. 

I have already referred to the German Schulze- 
Delitzsch societies of Germany, which have spread all 
over Europe. Here the members are chiefly small 
tradesmen and manufacturers who pool their surplus 
capital so that they may at once enjoy the highest rate 
of interest and lend capital to those of their associates 
in temporary need at the lowest rate of interest. 
There the act of association begins and ends. We 
may, therefore, without further discussion, eliminate 
them from the field of the genuine cooperative move- 
ment. 

The agricultural cooperative unions, first organized 
by Reiffeisen, are the same system employed among 
small farmers, a modification of which the Department 
of Agriculture in this country is now attempting to 
introduce among American farmers. Among the 
poorer peasant communities of Germany, Austria, 
?Iungary, Russia, and the Balkan states these socie- 
ties have been very beneficial to the small peasant land- 
owners in driving out the village money lenders. But 
as the object is supplying capital for private enter- 
prise, it is obvious that these institutions are in the 
same class with the Schulze-Delitzsch banks and have 
nothing in common with our consumers' cooperative 
movement. 

In large cities and industrial centers credit societies 
are sometimes organized among the working classes. 
These are much in the nature of cooperative savings 
banks. They usually precede the appearance of the 



184 consumers' cooperation 

cooperative stores because they require ver\' little skill 
or effort to establish. Quite a number are already 
established in this countn,-, notably in Xew York, 
where the Sage Foundation has waged a strong propa- 
ganda in their behalf, as '' encouraging thrift among 
the lowly." As a matter of fact they are a most ef- 
fective weapon against the loan shark ; much more 
effective than any amount of legislation could ever be. 

Societies of this class undoubtedly have a close affin- 
ity to Consumers' Cooperation. But where the regu- 
lar consumers' societies begin to appear, they disappear, 
the consumers' societies taking over the functions of 
the credit societies as a part of their business. There 
is no more need of separate organizations for banking 
than there is for the supply of bread or onions or ham, 
except when cooperative banking is federated, or cen- 
tralized, for major financial operations within the 
movement. Then there is something to be said in 
favor of the Russian system, as against the British sys- 
tem. To have the financial machinery of the m^ove- 
ment under separate control should have the tendency 
of lessening the danger of bureaucracy, in that it would 
split the power of the higher officials, as a body. It 
is well that those who spend the money should not 
also have the strings of the purse in their hands. But 
so far as each community is concerned, there is no 
danger of concentrating power into too few hands, and 
the local society, as is the case in Great Britain, may 
well handle the business of food distribution, banking, 
insurance, and even housing, all on the samie cooper- 
atiA'e basis. 

In the same way the Reift'eisen credit societies will 
also tend to disappear as the agricultural sales socie- 
ties become bigger and extend over a wider territory 
of activities. 



CHAPTER II 

COOPERATION AND SOCIALISM 

In contrasting Consumers' Cooperation with the agri- 
cultural associations I think I have at the same time 
emphasized the revolutionary character of the former 
and made it obvious that the latter are an integral 
part of the capitalist system. Therefore the attitude 
of Consumers' Cooperation toward the organized 
farmers will be identical with its attitude toward the 
whole capitalist system. 

And what is that attitude? Is it open attack? 
Have we here the class struggle of the Marxian So- 
cialists? Will this opposition of interests develop 
more definitely until finally the climax is reached and 
the social revolution is precipitated? 

Beyond any doubt Consumers' Cooperation is an 
anti-capitalist, revolutionary movement, aiming toward 
a radical social reconstruction based on an all-inclusive 
collectivism. Does this mean that it is standing shoul- 
der to shoulder with the Socialist parties and, with 
them, is fighting for the total destruction of capitalism? 

Between the Cooperator and the political Socialist 
there is undoubtedly a certain degree of af^nity. The 
same hatred of the inequity inherent in capitalism, and 
the desire for a fundamental democracy that shall 
penetrate below the superficial shell of a mere political 
government animates them both. They go even fur- 
ther than that together, for both attribute all industrial 
evils to the same cause : the institution of private profit. 

i8s 



i86 consumers' cooperation 

In a campaign of destructive criticism of capitalism 
they might well join hands and work together. 

But when they come to constructive action their 
roads part. To some it may seem that these diverging 
paths join again, in the distant future, as the rising 
ground overlooking the promised land is reached. If 
State Socialism is the final goal of the Socialists, then 
obviously there is no prospect of future reunion. 
Who, for a moment, imagines that the British Co- 
operators will hand over their vast flour industry or 
their gigantic shoe factories to a central body of poli- 
ticians in London the moment the Labor party cap- 
tures a majority of the seats in Parliament? True, 
State ownership does not represent the ideal of all So- 
cialists. But in so far as complete State ownership 
and monopoly is rejected by the Socialists themselves, 
the modifications are in the direction of direct control 
by organized groups of workers : Syndicalism. This 
tendency hardly travels in the direction of Consumers' 
Cooperation. That theory has been bitterly fought 
before, and it would be fought again, all the more in- 
telligently and stubbornly because of past experience, 
and with none the less prospect of success on account 
of the greater development to which cooperation would 
by that time have attained. 

Furthermore, it must be admitted that there are 
some spokesmen for Socialism, among them such 
American leaders as Morris Hillquit and Meyer Lon- 
don, who foresee the influence which the consumers' 
organizations will wield when once Socialism is in a 
position to begin practical reconstruction and are will- 
ing to admit them as an integral part of the general 
organization. In Great Britain Mrs. Sidney Webb, a 
Fabian Socialist, recognizes the fact that whatever ter- 
ritory the Cooperators possess themselves of mean- 



COOPERATION AND SOCIALISM 1 87 

while they will hold when once Socialism begins taking 
control. But this, to her, is nothing more than a sort 
of a reservation apportioned to a friendly tribe of In- 
dians and will cover only about a fifth of the total 
industries. 

In 1 9 10 an international SociaHst congress, assem- 
bled in Copenhagen, passed a resolution indorsing Con- 
sumers' Cooperation, urging all Socialists to join con- 
sumers' cooperative societies, and recognizing them as 
" an effective weapon in the hands of the working 
classes in waging the class struggle." The eighth in- 
ternational cooperative congress, which was in ses- 
sion at the same time, in Hamburg, on receiving the 
message from Copenhagen, passed a resolution of 
thanks, " without any reference to politics," but it did 
not then, nor did it three years later, at Glasgow, pass 
any resolution indorsing Socialism. 

Does Consumers' Cooperation recognize that basic 
doctrine of Marxian Socialism, the class struggle? 

Decidedly not. \ ^' .,», 

From the point of view of^th^Coc^perator^lhere is 
indeed a clearly defined cleavage betweelfi^JtS' own sys- 
tem of industry and that of capitalism. But this is 
not a class-to-class struggle. First, consumers are not 
a class. That personal interest which draws the indi- 
vidual into the membership of the consumers' organi- 
zations is equally live and equally pertinent to every 
member of society. If there are multitudes who have 
not yet joined, that is because knowledge of cooper- 
ation has not yet become universal, while others again 
attach more importance to their special class interests, 
or privileges. The interest of the consumer is uni- 
versal, all-inclusive, as broad as the earth itself. 

On the other hand, capitalist interests, among which 
we may include those of the agricultural associations, 



1 88 consumers' co5peration 

are not uniform. Indeed, capitalism is broken up into 
countless groups, large and small, each of which is 
separated from all the others by the same chasm which 
separates them all together from Consumers' Cooper- 
ation. To the stockholders and the officials of the big 
corporations manufacturing clothing the stockholders 
and the officials of the big shoe manufacturing compa- 
nies are not fellow capitalists; to them they are con- 
sumers. To the manufacturers of agricultural ma- 
chinery all farmers are consumers. To the manu- 
facturer of automobiles John D. Rockefeller himself 
is only a consumer. This diversity of interests pene- 
trates even into a field which might be considered a 
solid whole : agricultural production. Between the 
very associations we have been describing there is this 
same split. As a concrete instance, among the Ameri- 
can wheat growers there is a strong sentiment against 
the Mexican sisal planters, who have done exactly what 
the wheat growers are doing: combined in an agricul- 
tural association and raised the price of the twine which 
the American wheat grower must use for binding. 
And the members of both these classes of agricultural 
association, the American wheat growers and the Mex- 
ican sisal planters, are in their turn exploited by the 
Brazilian coffee planters, who, by the samie methods, 
have raised the price of coffee. 

To this diversity must be added still another divi- 
sion breaking into the very groups themselves, setting 
individual against individual: competition. If one 
shoe manufacturer recognizes another shoe manufac- 
turer as a brother capitalist, as he does in his manu- 
facturers' association, deeper down, even though it be 
only subconsciously, he also hates him as a rival. 
When was any class struggle so bitter or so well de- 
fined as a rate war between railroads? And how 



COOPERATION AND SOCIALISM lOQ 

lavishly have the orange growers of California spent 
their funds to oust the Southern European orange 
growers from the New York market. What is a 
*' protective " tariff but a legislative measure which one 
capitalist group employs to harm another capitalist 
group ? 

From so divided a camp cooperation has so far had 
nothing to fear. True, as I have recorded in my nar- 
rative, there have been violent clashes, and there will 
probably be bigger fights in the future. But when the 
meat interests of Glasgow attacked the Scottish Whole- 
sale with so much determination, they may have had 
the sympathy of the private shoe and the private cloth- 
ing interests, but they certainly received no material 
support from those natural allies. In still earlier days 
the grocery wholesale merchants of England attempted 
to initiate a general boycott of the English Wholesale 
Society, which was then a mere purchasing agency. 
The manufacturers who did respond to this appeal were 
those who numbered the wholesale merchants among 
their chief customers, but the coal-mining interests 
and the railroad interests were not even aware of the 
movement. And when the Swedish Wholesale Society 
quietly broke up the Swedish sugar trust, there was 
no indication at the time that the Swedish bankers 
were even mildly interested. On the contrary, a na- 
tional parliament, presumably composed of a majority 
of " capitalist party " representatives, administered to 
the fallen food combine a few extra kicks for luck. 

On the other hand, cooperation has no need to at- 
tack the capitalist groups. When special interests, suf- 
fering under immediate competition with some newly 
established cooperative enterprise, have ventured to 
deliver their futile assaults on the cooperative citadel, 
cooperation has indeed struck back, sometimes by eco- 



IQO CONSUMERS COOPERATION 

nomic action, as in the case of the Scottish Cooperators, 
who built their own soap factory when the Sunlight 
Soap Company attempted to dictate to them, and again 
in the form of propaganda. But it would be illogical, 
and more than likely it would also retard the movement 
harmfully, were the cooperative movement to adopt an 
aggressive policy in its attitude toward capitalist in- 
dustry. On the contrary, in the case of the agricul- 
tural associations, where the capitalist element is so 
diffused among a great number of individuals, it is to 
the interest of cooperation to travel slowly and with 
careful steps. First, it must consolidate and organize 
all that it has before it advances. Salients are espe- 
cially dangerous to cooperation. Its whole line should 
advance together. These are technical reasons. Then 
there is the human reason: that whatever radical 
changes cooperation creates in individual industries 
should be accomplished as gradually as possible, so 
that the minimum amount of harm may be worked to 
the individuals directly concerned, even though those 
individuals be capitalists. 

For the interest which permeates the whole cooper- 
ative movement spreads over and through the units of 
capitalism as well. As a devotee of private profit the 
farmer may be opposed to the cooperative movement, 
but as a human being he is also a consumer, therefore, 
to the conscious Cooperator, a prospective brother and 
a fellow member. A consumer he always has been 
and always must be ; a farmer in business for himself 
he need not always be. It would be the height of 
folly for the cooperative organization to rouse his ani- 
mosity to fighting heat before he has had a chance 
to consider fully whether his social interests or his 
class interests predominate. The longer he has to 
consider, the more thoroughly he has the practical 



COOPERATION AND SOCIALISM IQI 

working out of cooperation demonstrated to him, the 
more likely he is finally to decide in favor of his social 
interests. 

Thus cooperation, in contrast to the political action 
of the Socialists, advances by means of economic 
action. True, considering capitalism as a mere sys- 
tem, it will be harmed by this process, perhaps even- 
tually destroyed as an institution. Its growth will 
first be checked, then it will suffer from starvation. 
In the field of manufacturing this process is already 
clearly indicated in Great Britain. The Cooperators 
are alreadv in possession of the biggest flour-milling 
plants in the kingdom. These, first of all, have al- 
ready limited the profits of the private millers by com- 
petition. As they increase in number and output, pri- 
vate milling will gradually come to a standstill, until 
finally, when over half the population is using coopera- 
tive flour, as one-fourth is already using it, private 
flour mills will no longer be established and every old 
one going out of business will tend to decrease the 
private flour-milling industry. But so gradual is this 
change, or transformation, that nobody is suffering in 
consequence. Presumably the superintendent of the 
big cooperative flour mills at Newcastle, now the sal- 
aried servant of the cooperative movement, would have 
been a prominent flour manufacturer and a capitalist, 
had cooperation never appeared, but he would prob- 
ably be the first to deny that thereby any harm had 
been done him. 

In the field of agriculture this process has hardly 
made a beginning. The few thousand acres of tea 
lands owned by the British Cooperators have probably 
not reduced the membership of the tea planters' asso- 
ciation in Ceylon by more than two or three dozen 
individuals; the ten thousand acres of wheat land in 



192 CONSUMERS COOPERATION 

Canada perhaps will represent from fifty to a hun- 
dred vacancies in the wheat growers' associations of 
Canada. Nevertheless, even so little is enough to in- 
dicate the path that cooperation will travel through the 
field of agricultural production. Here enough has 
been established in actual fact on which to base deduc- 
tions worth volumes of abstract theories by the wisest 
social philosophers. It establishes the principle that 
land, the original source of the production of the ne- 
cessities of life, shall be owned collectively and con- 
trolled democratically by the users thereof : the people 
as consumers. 

Using our facts as a basis, there comes the tempta- 
tion to build a Utopia, after the fashion of Bellamy 
and H. G. Wells. Developing them with the aid of a 
little imagination, we might paint a picture of the co- 
operative commonwealth of the future, a consumers' 
paradise. And, after all, is that so violent a leap of 
the imagination, from a cooperative movement in 
Great Britain, including nearly a third of the total 
population, to the same movement, including the total 
population? What would Great Britain be like under 
universal cooperation? 

But such a finished picture I do not care to consider. 
Bellamy's socialized state has always seemed to me a 
sort of an idealized Prussia, nor do I believe any Co- 
operator would view such an ending as anything but 
tragic. Herein lies a fundamental spiritual, or psycho- 
logical, difference between Socialism and cooperation. 
Marxian, or revolutionary, Socialism would be grimly 
complete. It is based on the principle of all or noth- 
ing, in its purest manifestation. 

Not so cooperation. Cooperation is a voluntary 
movement. It is opposed to the idea of conscription. 
Between the industrial system which would include 



COOPERATION AND SOCIALISM 193 

999 socialized flour mills and one private flour mill, and 
the industrial system which would include all of the 
I, GOG socialized flour mills, there is the difference be- 
tween two universes. 

The Socialist would create, or take over, a whole 
industry; then, by legislative enactment, completely 
destroy all competition. He would create a State 
monopoly. 

Theoretically cooperation would accomplish the 
same end; that is, the complete socialization of a given 
industry by means of cooperation. But it would al- 
ways leave the door open to the private capitalist who 
could, or thought he could, carry on business in com- 
petition with the socialized industry. The attitude 
of cooperation would be that if the private capitalist 
were successful in his attempt, then there would be 
suflicient ground for an investigation into the admin- 
istration of the socialized industry. 

Cooperation would not appeal to the arbitrary meth- 
ods of legislation to remove its opponents from the 
field. If it overcomes them, it will do so in open com- 
petition on a fair field, and the victory it achieves will 
be through its own inherent superiority over its op- 
ponents. In the economic arena it feels itself irre- 
sistible, competent to meet all attacks. Cooperation 
has no need to appeal to political action to establish 
itself. 

And this is a fact which the Socialists refuse to 
recognize; that legislation may regulate a new social 
order, as it develops, but it cannot create a new social 
order. The traffic policeman, representing municipal 
law, may ease the congestion of the street traffic by 
regulating it, to a limited extent. But finally the street 
must be broadened, and then the policeman is relegated 
to the background, until the laborers and the builders 



194 CONSUMERS COOPERATION 

and the architects and the engineers, deaHng with ma- 
terial substances, have done their work and gone away. 

Capitahsm, as an industrial system, was not legis- 
lated into existence, and it will not be legislated out of 
existence. Capitalism acquired its power and con- 
solidated its position step by step ; by economic action. 
It is by just this same evolutionary process that co- 
operation will acquire supreme power and take the 
place of capitalism. Once in position, capitalism did 
indeed, through its political parties, regulate condi- 
tions. The enactment of corporation laws followed 
corporations; it did not precede them. Capitalism 
has also employed legislation in rendering its position 
more secure; all anti-labor laws are of this nature. 
When the Socialists propose to lift a new social system 
into place through legislation, they are in the position 
of the man who would lift himself by his own shadow. 

But this is not to say that cooperation must entirely 
ignore politics ; that, too, would be a dangerous course. 
Hitherto it has done so, outside Belgium. But in 19 17 
the British cooperative movement definitely declared 
for participation in politics, and in Russia cooperation 
during the Kerensky regime took the same attitude. 
It is significant that in neither case did this action con- 
sist of af^liation with the Socialist parties. 

For cooperation must necessarily have a political 
program! of its own. First of all, it must defend it- 
self against restrictive legislation, such as was passed 
in Germany against the movement. It was the need of 
doing this that drove the British Cooperators into 
politics. Food regulation having become so promi- 
nent a state function during the war, the British Gov- 
ernment appointed on the various food administrative 
boards men closely associated with the big capitalistic 
interests of the country. These, naturally, have taken 



COOPERATION AND SOCIALISM 195 

all the measures in their power to harm the cooperative 
movement. Their influence, together with that of the 
capitalistic representatives in Parliament, was suffi- 
ciently strong to impose a tax on profits which was 
made to extend to the surpluses of the cooperative 
societies, which is, of course, not profit at all. It was 
to protect itself against such unjust measures that 
British cooperation went into politics. 

Secondly, cooperation, as it creates new social con- 
ditions, must exercise its political power in regulating 
the new conditions, as capitalism did during its prog- 
ress. Being founded on a universal social interest, this 
will be a simpler task than that with which capitalism 
had to contend, within whose fold, as already pointed 
out, there are so many conflicting interests to be ad- 
justed. Formerly this was done through individual 
legislators, looking to the cooperative vote through 
other parties, or disinterested partisans of the move- 
ment. One of the most definite tasks before the co- 
operative members of Parliament will be the enact- 
ment of a great deal of labor legislation. Coopera- 
tion, which not only stands for trades-union conditions 
in its own establishments, but attempts to grant more 
than these conditions demand, finds itself seriously 
handicapped in the competition which the private in- 
dustries are able to exercise in this field. Obviously 
it cannot pay much higher wages than the private 
manufacturer, without making the consumer pay 
higher prices. Through legislation cooperation can 
force the capitalist to m.eet it on equal conditions where 
labor is concerned. Here the cooperators, naturally, 
will find the Labor party a strong ally, and already 
the Labor party has paved the way in this direction 
some distance ahead. Cooperation, too, in all coun- 
tries, naturally stands squarely for free trade; it is 



196 consumers' cooperation 

against any sort of tariffs, protective or otherwise. 
Indeed, I\Irs. Sidney AVebb says that England's poHcy 
of free trade has been chiefly due to the subterranean 
influence of the cooperative movement. Now it may 
exercise its influence directly, therefore more effec- 
tively. It will also be obvious that cooperation would 
always be inclined to support, and perhaps initiate, 
such legislation as would tend in the direction of the 
Single Tax. 

But again I emphasize the fact that this is all sec- 
ondary matter to the cooperative movement; the cav- 
alry to its main army, as it were, skirmishing ahead 
and guarding the main body from surprises. While 
the Socialist pins all his faith to his political vote, as 
a citizen, the Cooperator exercises his power chiefly 
through his economic vote, as a consumer. Here 
minorities may exercise their proportionate degree 
of power without having to wait for ignorant majori- 
ties. Here, too, there is universal suffrage. For even 
the old grandmother, as she sips her tea, may decide 
whether or not capitalism shall have the support of the 
twenty per cent, profit on that tea. This vote she 
may exercise every day of the week, as often as her 
health and purse will permit. Even the baby has a 
vote, in the milk it sucks from its bottle, though this 
vote, it must be admitted, papa or mamma probably 
casts as a proxy. These are the votes which really 
matter to the capitalist system, and which shall decide 
its fate. And the capitalist realizes it; witness the 
millions he spends in campaigning for such votes, not 
once in four years, but day by day, in the acres of 
newspaper space he devotes to advertising. 

But though we may refuse to contemplate such ab- 
solute ETopias as the Socialist would impose on us by 
majority vote, there is no reason why we may not 



COOPERATION AND SOCIALISM 197 

attempt a tentative survey of the probable limits to 
which cooperation may some day extend. Being based 
on the volition of individuals, it is hardly conceivable 
that cooperation will ever become absolutely universal. 
Capitalism, though it is now at the apex of its power, 
has not completely abolished the handicrafts. And 
why, in fact, should not the man with a new inven- 
tion or a new device have the right to exploit it com- 
mercially? Why should there not always be room 
for the private publisher, not only of books, but of 
periodicals based largely on the expression of per- 
sonal opinion? Some means there must always re- 
main open to personal criticism of public affairs, and 
the organization, or organizations, controlling pub- 
lic affairs, no matter how democratic their principles, 
should be the last to control the press. This prin- 
ciple is embodied in the fact that in Great Britain The 
Cooperative News, the official organ of the British Co- 
operative movement, is owned and controlled by an in- 
dependent cooperative organization. Universal co- 
operation would, indeed, make for a radical modifica- 
tion in our present system of periodical publication 
"^ by removing the foundation on which it is now sup- 
ported: advertising. It is not unlikely that private 
publications would have to look largely to their sub- 
scribers for financial support, but the increased sub- 
scription rates would perhaps not be out of proportion 
to the increased prosperity of the masses. 

Then why should we abolish the man with original 
designs in furniture, in wall papers, in rugs, or in pot- 
tery, who might open a little business of his own and, 
on the strength of his own individuality in creative 
work, venture to compete with the more conventionally 
designed and more uniform products of the coopera- 
tive factories? Why should not the inventor of a new 



198 consumers' cooperation 

and useful device have the monopoly of his own in- 
vention for a period of years and by virtue of this 
monopoly establish a new industry ? By the time the 
patent right had expired, he would have gained his 
just reward and, if the importance of the industry 
warranted it, it could be taken over by the coopera- 
tives. Or he might sell it to them in the beginning. 
These are merely tentative suggestions, outlining the 
possible boundaries between the private and the public 
industries. 

The same would apply to agriculture, perhaps more 
widely. Capitalism to this day has not penetrated 
agriculture to the same extent that it has permeated 
the manufacturing industries. The small farmer of 
the present is in actual fact nothing more than the 
master craftsman of a century ago. To the extent 
that labor-saving machinery may be applied to agri- 
culture on a big scale, as in the production of the 
grain crops, or potatoes, cotton, fruits, etc., we may 
look for an extensive development of consumers' co- 
operative agriculture. The reaper, the harvester, and 
the tractor are the logical tools of a collective body. 
We may even look to cooperative industr}^ including 
the herding of vast flocks of sheep or herds of swine 
and cattle, and so prolonged an operation as the pro- 
duction of timber, once the natural forests are de- 
pleted, would naturally come under the head of pub- 
lic enterprise. Local cooperatives will also engage, 
as they are in fact beginning to do now, in extensive 
truck gardening in their own immediate localities. 

But to the enthusiastic horticulturist, who may not 
choose to engage in the public service, and who can 
produce a more delicious peach than is grown in the 
vast public orchards, there should always remain open 



COOPERATION AND SOCIALISM 199 

a remunerative market. The poultryman who devotes 
himself to the breeding of superior fowl, the gardener 
who can produce a frost-defying cucumber, or who 
can impart special flavor to a strawberry : these are 
men who may defy any social system. It is only the 
big operator of hundreds of thousands of acres on 
the one hand, and the poor, plodding farmer of no 
special ability and with a perpetual mortgage over 
his head who will be eliminated. Both will be reduced 
to the status of social servants, and who shall say 
that the latter will suffer thereby? 

Cooperation, because of its very bigness and breadth, 
cannot ever entirely eliminate private enterprise. Its 
legitimate territory is within the older and the bigger 
industries. Private enterprise belongs to the newer 
and the smaller industries, where markets are limited 
and human ingenuity may have full scope. The 
boundary between this broad center of collectivism 
and this outer fringe of capitalism will be determined 
by economic laws; certainly it should not be fixed by 
legislation. By economic laws I mean competition, 
in its best sense. The trouble with modern capitalism 
is that it is ceasing to be competitive. If the private 
manufacturer can produce chairs and tables more pleas- 
ing in design to a certain number of people than the 
chairs and tables turned out by vast cooperative factor- 
ies, which would not be unlikely, those certain people 
will patronize him, even though his prices may be 
higher, w^hich would be inevitable. But the moment 
he attempts large-scale production he, too, will learn 
that artistic tastes differ and so he will be reduced 
to conventional designs. It is then that he will find 
himself unable to compete with the cooperative fac- 
tories, because his creative talent will no longer be 



200 CONSUMERS COOPERATION 

an asset to him. Thus his growth to undesirable 
size will be limited by economic laws, without the need 
of legislation. 

The contrast between Cooperation and Socialism, 
however, goes below these outward manifestations of 
principle or method, down into a fundamental differ- 
ence of underlying human psychology, which is too 
subtle to be easily defined. 

Throughout all social organization two conflicting 
tendencies invariably manifest themselves. In this 
country Thomas Jefferson represented one ; Alexander 
Hamilton the other. One represented what is com- 
monly called " states' rights," while the other stood 
for Federalism, centralization. Jefferson stood for 
the individual; Hamilton for the State. 

The conflict of principle between these two men is 
universal. Only ten years ago the organized revo- 
lutionists of far-away Macedonia, knowing absolutely 
nothing of Jefferson or Hamilton, were on the point 
of flying at each other's throats over this issue; whether 
a central committee should be all-powerful, or whether 
it should be merely a clearing house of proposals for 
joint action between local organizations. 

This split runs down through the whole history of 
the revolutionary labor movement. It manifested it- 
self when the first definite mass organization was at- 
tempted, in a quarrel between Alarx and Bakunin. 
Marx, though a Jew by blood, was a German by 
psychology; Bakunin was a Russian. Each was a 
representative of the psychology of his people. Had 
Bakunin possessed a more logical mind he might have 
caused the split in the international revolutionary labor 
movement to divide it more equally. But his misty 
doctrines turned away all the practical-minded, and 
only the extremists, those guided wholly by intuition, 



COOPERATION AND SOCIALISM 201 

separated themselves from the SociaHsts and called 
themselves Anarchists. 

Yet Bakunin's intuition reached higher into the rari- 
iied atmosphere of human liberty than did Marx's more 
pretentious structure of scientific reasoning. There is 
a certain grim logic about Socialism, but unfortunately 
human liberty cannot entirely be built on logic. The 
assumption that conditions which will make one mil- 
lion human individuals happy must necessarily make 
two millions of individuals happy is perfectly logical 
— but absolutely untrue. 

To my mind the recent great war between Prussian- 
ism and the rest of civilized mankind, considered in its 
broadest aspect, is this same conflict assuming universal 
scope in a world awakening to democracy. Marx, La- 
salle, and Engels were Germans, and their doctrines 
were based on a German, a Prussian, psychology. Be- 
tween Lasalle and Bismarck there was an affinity which 
had practical results. Each influenced the other. 

Under the pacifism of the majority of pres- 
ent-day Socialists of those countries at war with Ger- 
many there is a deep psychological basis. For 
under an outer shell of imperialism Germany had 
developed a social system which, in essential char- 
acteristics, was truly Socialistic. Not Emperor Wil- 
liam or even the Crown Prince were attempting to 
overpower mankind; behind that attempt there was 
an impulse born before either of them. It was the 
German people, inspired by an ideal which they would 
enforce on the rest of the world by a force no less arbi- 
trary than the force of political majority rule, and no 
less unjust, no less undemocratic. To the extent that 
this German ideal had spread to other countries, to 
that extent there was sympathy for Germany's efforts 
in the " enemy countries," manifesting itself in the 



202 CONSUMERS COOPERATION 

attitude of the various Socialist parties, in greater or 
lesser degree. The split which this attitude has 
brought about in the various organizations is only a 
continuation of the split which sundered Marx and 
Bakunin. 

Herein lay the strength of the German armies 
against superior numbers. They Vvcre inspired by an 
ideal which, however repellent it may be to most of 
us, is still a social ideal, and not mere greed for con- 
quest. Their efficiency, their solidarity, their devo- 
tion to logical completeness, their vei-y disregard of 
the rights of individuals, are all dominating qualities of 
Socialism. 

It was their failure to understand this that defeated 
Trotzky and Lenin in their attempt to revolutionize 
the Germans. For though they and their Bolsheviki 
following are Socialists in name, temperamentally they 
are Russian, therefore Bakuninites, Anarchists. Their 
whole policy of internal organization, based on the 
local Soviets, their principle of '' self-determination," 
their early ideal of a Russian Federal Union, and, 
finally, their willingness to compromise wdth the co- 
operative organizations, all proclaim what one who 
knows the Russian mental attitude toward society 
might already know. The Russian ideal, presented 
to the German masses through the tons of literature 
passed over the fraternizing military fronts during 
the Brest-Litovsk peace negotiations, made little im- 
pression on the Germans. Eventually the German 
masses did revolt, but it was not to join the Russian 
Bolsheviki, but to bring the war to a close. Later, 
when " Bolshevism " did manifest itself to a minor 
degree in the Sparticide uprisings, those same Ger- 
man revolutionists turned on them and suppressed them 



COOPERATION AND SOCIALISM 2O3 

unmercifully, murdering their two chief leaders with 
ferocious cruelty. 

I realize that there will be no little protest on the 
part of most Americans against an attempt to prove 
affinity between Thomas Jefferson, Michael Bakunin, 
and Lenin, even though this include recognition of 
Jefferson's mind as the clearer of the three. But there 
is this in common between them: each instinctively 
recognizes the superiority of the individual over the 
State; while Lasalle and Marx raise the State above 
the individual. Jefferson would have authority initiate 
from belovv^, mounting upward. Marx would concen- 
trate it in a center, radiating outward and downward. 
Jefferson was a democrat. Marx, at best, was only a 
republican. And he could even accept imperialism as 
an inessential detail. 

If I seem to have digressed it has only been to 
create a broader foundation for a clear understanding 
of the true psychology of cooperation. Cooperation 
is based on a conception which Jefferson first defined 
and which Bakunin tried to elaborate. To this ex- 
tent they were the inspired prophets of cooperation. 

For cooperation would base all social authtority on 
the individual, the local group, and would delegate this 
authority to central bodies only through federation for 
special purposes. It abhors centralization and cen- 
tralizes only such institutions as have outgrown local 
conditions. It makes for efficiency, certainly, but it 
does not make efficiency an aim above social happiness. 
For it is based on the happiness, the free will, of the 
individual. It desires to include no one it cannot 
benefit. It rejects the theory that what is good for 
nine, is good for ten. It has no passion for logical 
completeness; it has no desire to become so universal 



204 CONSUMERS COOPERATION 

that every individual shall be included within its sys- 
tem. When cooperation has spread just so far as it 
can benefit human beings, it will stop, and be perfectly 
content to stop. Within cooperation there is no im- 
pulse to extend the authority of one group over an- 
other, much less to extend any authority to outside 
elements. But on the other hand it is bitterly opposed 
to the intrusion of outside authority within its own 
domain. Outsiders may devise whatever social sys- 
tems they may choose, but they must be careful not to 
bump the corners of their systems against the sides of 
cooperation. Cooperation is the very antithesis of 
imperialism. It is, in short. Anarchism rationalized. 



CHAPTER III 

COOPERATION AND LABOR 

There remains still one great social force whose rela- 
tion to Cooperation I have not yet considered, and that 
is labor. Being the most important, I have left it to 
the last. 

Socialism, ostensibly, is based on the class interest 
of labor, but this is only true to the degree that it 
becomes modified away from State Socialism. State 
Socialism, obviously, is based on citizenship, and would 
only benefit the worker as a member of society, and 
this quality it has in common with cooperation. For 
this reason many Socialists, whose conceptions of so- 
cial justice are based entirely on labor, desire to 
modify State Socialism in the direction of Syndicalism, 
whereby they would have the organized workers in 
each industry share in the control with the State. 
Traveling in this direction, we finally come to Syn- 
dicalism, which does not recognize the interests of so- 
ciety at all, but only those of the organized workers, 
with a strong preference to unskilled labor. And as 
the Socialist tends in this direction, so does he lose 
faith in political action and inclines to rely on in- 
dustrial action; continuous and general strikes, 
sabotage and even violent revolution. The social 
scheme proposed by the Syndicalists, if anything so 
crude may be termed a scheme, is that the workers 
themselves shall control each industrial plant on a 
democratic basis, cohesion in the general management 
of all the industries being accomplished by means of 

205 



2o6 consumers' cooperation 

federation. Some Syndicalists would modify this by 
forming joint central committees, or commissions, with 
representatives of society in general. Nevertheless, 
Syndicalism considers labor the predominating in- 
terest in society and would subjugate all others to it. 

This brings us back to the Christian Socialists, and 
while it may seem absurd to attempt to prove affinity 
between Charles Kingsley, a church prelate, and 
Thomas Hughes, author of " Tom Brown's School 
Days," on the one hand, and the syndicahst leader 
James Larkin and our own William Haywood, of the 
I. \V. W., on the other, their ultimate social ideals were 
almost identical. Their differences were only in 
method. Instead of the general-strike methods of 
the I. W. W., Kingsley and Hughes believed in the 
economic development of the self-governing work- 
shop to universal dimensions, and when they saw the 
impossibility of making any headway by such means, 
they advocated a quiet revolution within the territory 
of capitalism itself, through profit sharing, a form of 
partnership between the worker and the capitalist 
wherein they hoped that the worker would ultimately 
squeeze his partner out of the premises. With this 
basis for social reorganization, cooperation, as we have 
already seen, has no sympathy. When such Syndicalist 
leaders as James Larkin proclaim themselves champions 
of cooperation, it is only because they do not grasp the 
true basis of cooperation. 

At first glance it would seem that cooperation has 
nothing to offer Labor, as such. The forty or fifty 
thousand workers employed in the productive plants 
of the two British Wholesale Societies present no strik- 
ing contrasts to working conditions in any large capi- 
talist factory under liberal management. They do, in- 
deed, average higher wages, shorter hours, and they 



COOPERATION AND LABOR 20/ 

enjoy better sanitary conditions, but they have no voice 
in the management and may be discharged at the will 
of their employer. At this point, therefore, there is 
little data to be discovered from which to draw deduc- 
tions. This, to many Socialists, would be conclusive, 
but in reply I can only point out that the condition of 
workers in the post-office departments or among the 
street cleaners of our large cities is not, by the Social- 
ists themselves, considered evidence of what conditions 
will be under a universal system of State ownership, 
and that no less an authority than Mrs. Sidney Webb, 
herself a State Socialist, has pointed out, in a report 
on '' An Inquiry into Alternatives to Capitalist Indus- 
try " (1914), conducted by the Fabian Society, and 
published in the New Statesman, that the average pay 
of the workers in the cooperative factories was higher 
than the wages of those in State employ, and that their 
working hours were shorter. 

But in spite of this capitalistic aspect to working 
conditions in the cooperative wholesale factories, it 
is notable that in all general labor disputes the Whole- 
sale Societies have instinctively allied themselves with 
the organized workers. During the big English coal 
strike in 191 1 the banking department of the English 
Wholesale Society financed the striking organizations 
by advancing them money on securities which the 
private bankers had refused to accept, and, incidentally, 
the Wholesale Society's bank dates its biggest expan- 
sion from that time, because of the patronage of labor 
organizations. A more striking illustration was fur- 
nished during the Dublin strike, in 1913. The in- 
formation had come to England that the striking dock 
workers were on the point of capitulating from starva- 
tion. Quick action was demanded, if they were to be 
helped. The British labor unions appealed to the Eng- 



2o8 consumers' cooperation 

lish Wholesale, which, at twenty-four hours' notice, 
loaded one of its own ships to the hatches with provi- 
sions and sent it into Dublin harbor to the relief of the 
starving strikers. The mad enthusiasm of the crowds 
which lined the dock at which the C. W. S. steamer 
was moored, their frenzied demonstrations of joy, the 
lines of hungry women and children which were sup- 
plied with food at the very gangways of the steamer, 
formed one of the few picturesque scenes in the history 
of a movement little picturesque in itself. The reader 
will recall a similar incident regarding the Maison du 
Peuple of Brussels, related in the chapter on Belgian 
Cooperation. 

And whatever the dispute between the Bolsheviki 
and the Russian Cooperators, Lenin at any rate does 
not deny cooperation its place in the labor movement. 

Why this instinctive sympathy for labor on the part 
of an organization which is itself one of the biggest 
employers of labor? Is it the character of the mem- 
bership, which is almost entirely recruited from the 
ranks of Labor? Beyond doubt that is one very 
strong factor, but the true reason goes even deeper 
than that. 

Cooperation is a labor movement fundamentally, 
but this only becomes obvious when we regard it 
broadly, taking in its original impulses with a wide 
sweep. 

But before proceeding further it becomes necessary 
to define Labor more accurately. The average Syn- 
dicalist considers only the factory bench workman or 
the unskilled wielder of the pick and shovel as a legiti- 
mate candidate for membership in his organiza^tion. 
At one time there were some organizations which ad- 
mitted only enough " intellectuals " to edit their official 
organs. Now there is a general inclination to draw 



COOPERATION AND LABOR 20g 

the line between productive and unproductive labor, 
but obviously this is not strictly carried out, for other- 
wise the I. W. W. organizations in the West would 
institute a strict inquiry into the use to which the 
copper of the Montana mines was being put before 
admitting the miners to membership, excluding those 
who were mining copper destined for the munitions 
factories. In personal conversation, Emma Goldman, 
who is more Syndicalist than Anarchist, told me that 
she regarded productiveness as the true basis for a 
definition of Labor, yet considered a diamond cutter 
a legitimate member of the working classes, while the 
overworked reporter of a newspaper she regarded only 
as a capitalistic parasite. 

Modern Socialists and Trade-Unionists, however, 
are inclining daily toward a more scientific definition, 
or interpretation, of the word labor, as witness the re- 
cent inclusion of " and brain workers." 

Under Labor we may properly include all those who 
live by labor; those whose means of livelihood are 
dependent on the remuneration they receive for service 
rendered, regardless of its social value. Thus, an ad- 
miral is as entitled to be classified as a worker as a hod- 
carrier, while a pushcart peddler, speculating on the 
profits of his sales, is obviously not a worker. One 
lives by effort, the other by speculative trade. One 
works for a wage, the other strives for profit. That 
the personal sympathy of the admiral may be with 
capitalism, as it probably is, while the pushcart peddler 
may be the secretary of a Socialist local, which is 
not unlikely, does not change the economic status of 
either. The status of worker or capitalist is in the na- 
ture of the source of his income; whether that be from 
physical or mental labor, or whether it be from trade 
profits, rents, interest on invested capital. 



2IO CONSUMERS COOPERATION 

Accepting this definition, it becomes plain that, in 
so far as cooperation tends to ehminate capitaHsm, to- 
gether with its chief ingredient, private profit, it also 
tends to increase the numbers of the working class. 
The hundreds of thousands of small storekeepers 
whom it has already caused to disappear in the ter- 
ritory it has invaded have reappeared as store man- 
agers or clerks in cooperative stores; social servants 
on a wage basis, therefore workers. This it has done 
in the domain of manufacturing as well, though not 
to the same extent, because there its advance has not 
been so extensive. 

This same end — the transformation of all members 
of society into workers, and toward which cooperation 
only progresses by degrees — Socialism would ac- 
complish by one fell swoop. Both Cooperator and So- 
cialist contend that this would be the natural result 
of a complete abolition of private profit as a means 
of subsistence, and obviously if you cannot live off in- 
terest or dividends, you must live by work. Carry- 
ing out the cooperative program to its logical con- 
clusion, this would mean that the entire membership of 
all the cooperative societies would consist of work- 
ers, organized as consumers. Thus the workers in the 
cooperative factories would be their own employees 
and, through their cooperative societies, would have 
full power to regulate working conditions to suit them- 
selves. This power the workers in the wholesale so- 
cieties' factories already have, but, of course, they are 
now only one per cent, of the total membership, the 
other ninety-nine per cent, being employed outside the 
movement. They have, therefore, only one vote out 
of a hundred in the regulation of working conditions 
in their factories, and if the other ninety-nine votes are 
invariably cast in their favor, it is only through sympa- 



COOPERATION AND LABOR 211 

thy, and not through direct interest. But, as coopera- 
tive production tends to increase at a faster rate than 
the membership, this ratio of one to one hundred will 
gradually change, with one hundred to one hundred as 
a final, though perhaps an impossible, ideal. To all 
practical purposes the ideal will be accomplished when 
the ratio is fifty-one to one hundred, and that is well 
within the limits of possibility. Such a situation 
would give the cooperative workers a majority control 
of their own working conditions. 

For the purpose of indicating tendencies, however, I 
shall continue to argue from the point of view of the 
ideal ; the possible one hundred out of a one hundred. 
Here, obviously, the workers and the consumers would 
be completely identical. With full power to raise their 
own wages as workers, there would be no incentive to 
do so, for the cost of living would rise automatically 
with the standard of wages. Under a system involv- 
ing production for use only. Labor would get the full 
product of effort, and there would be no question of 
either high or low wages. True, a certain portion of 
the wealth accruing from labor might be utilized in 
manufacturing machinery, or building new factories, or 
set aside in the national treasury, for the purpose of 
carrying on future productions, but all this would 
constitute social capital and would eventually revert 
to labor anyhow. 

At the present time the product of labor is divided 
between profit; that is, dividends on invested capital, 
interest, rent, etc., and labor. The constant dispute 
over the relative portion of each is the perpetual strug- 
gle between Capital and Labor. The tendency of 
Capital has been to take all except just enough to keep 
Labor alive and efficient. Through the trade-union 
movement Labor has succeeded in getting a little more, 



212 CONSUMERS' COOPERATION 

but while granting the increase in wages, the capital- 
ist simply retrenches from the cost of living by charg- 
ing the public more for his product, so that the trade- 
unionist, as the American Federation of Labor has 
now finally come to admit, simply chases himself 
around in a circle, while the capitalist stands outside 
the ring and laughs at him. Under universal coopera- 
tion this leak in the middle would be stopped, and the 
relation between wages and the cost of living would 
be fixed, with nothing to change it except inef^ciency 
and waste. 

Summed up, and considered in its social aspect, as a 
universal institution, cooperation would mean the peo- 
ple of the country organized as consumers, employing 
themselves as workers, producing their own needs on 
a basis of actual labor cost, for use only. Thus not 
only the incentive, but the means, to exploitation of 
Labor would be entirely absent. 

Cooperation, then, would establish its industrial 
democracy on the basis of the social interests of the 
people as consumers. It places consumption as the 
chief end of society, labor being merely a means to 
that end. 

The Syndicalist would reverse this plan by organiz- 
ing society on the labor interests of its units; it would 
consider labor as the chief social end, with consump- 
tion as a means thereto, an entirely secondary m.atter. 
In plainer words, the Syndicalist contends that we eat 
that we may work, while the Cooperator thinks that 
he works because he must eat. 

But aside from this, the Syndicalist bases his phi- 
losophy on one very obvious fallacy : that the interests 
of Labor are uniform, homogeneous. Which is a 
counterpart to the ^larxian fallacy that the interests 
of the capitalists are uniform. In actual fact the same 



COOPERATION AND LABOR 213 

diversity of interests which rends capitalism as a class, 
also breaks up the solidarity of Labor as a class. 

Let us consider the Syndicalist scheme in ideal op- 
eration. The miners control the mines, the railway 
employees control transportation, the wheat growers 
control the production of wheat. Looked at from 
above, they are indeed all workers, each trade organ- 
ized by itself, managing its own industrial affairs. 

But unfortunately their relations with each other do 
not run up and down, but laterally. Each trade, or in- 
dustry, is surrounded, not by fellow workers, but by 
consumers. The miners, in guarding their rights, 
would demand as high a price as possible for their 
coal from the members of the other industrial groups, 
the transportation workers would get as far away as 
possible from the notion that the general public should 
ride in the trains free, while the wheat growers would 
not only demand lower freight rates from the trans- 
portation workers, but demand top-notch prices from 
them for their wheat. 

Truly, says the Syndicalist, this will all be adjusted 
by central councils, who will regulate these slight dis- 
crepancies of interest. But these councils, represent- 
ing all the industrial groups together, would, as fed- 
eral bodies, really represent all society as a whole, 
which would be the consumers, after all. Thus the 
Syndicalist himself must come back to the fact that 
labor is, after all, subsidiary to society as a whole. 

But these central councils would have only slight 
power presumably. Suppose the transportation work- 
ers should come to an open disagreement with the 
council. Closely organized as they would be, with 
discipHne developed through their joint management 
of the national railroads, they would have a power in 
their hands capable of bringing all of society (the rest 



214 CONSUMERS COOPERATION 

of the labor groups) down on its knees before them. 
And who shall say that they would never exercise it, 
after having already attained power through such 
means. 

This is, of course, an extreme situation; it certainly 
could not become permanent. But the social equilib- 
rium would constantly be disturbed by this tendency 
on the part of the big and powerful trade interests to 
assert themselves against the rest of the workers. An 
industrial democracy founded on labor is no democ- 
racy at all, since the true basis of power would rest 
with the big labor organizations operating the vital in- 
dustries. This power they might never exercise vio- 
lently, but in a more subtle way it would, nevertheless, 
dominate that section of society composed of the minor 
labor organizations. 

Cooperation, on the other hand, is not entirely free 
from this same fault. Under universal cooperation 
society as a whole would dominate, and all the labor 
groups would be subservient to it. This would entail 
no injustice to labor as a whole, because all members 
of society would be workers, and all of the product of 
labor would therefore go to labor since none would 
be devoted to private profit. But there would 
always be the possibility of dispute between one trade 
and another ; between the carpenters and the miners ; 
between the railroad workers and the wheat growers, 
as to w^hich deserv^ed the greater remuneration. Here 
is a cause for friction which probably no social system 
could ever entirely eliminate; certainly the solution is 
not in the Syndicalist plan to let each trade group fix 
its own remuneration. 

These conflicting interests between the various ele- 
ments and classes and trades within Labor itself co- 
operation would adjust as nearly as is humanly possi- 



COOPERATION AND LABOR 21 5 

ble by making Labor entirely subsidiary to the great 
motive behind it — consumption, the human desire to 
fulfill the needs and pleasures of life. On this basis 
alone can a true democracy find a uniform founda- 
tion, for it is the one interest which we all have in 
common, and to very nearly the same degree. We all 
need shelter, we all need food, we all need clothing; 
the demand for these necessities is the impulse which 
sets going the wheels of industry. 

Consumption is the basis of all industry, for it is 
to supply our needs that we labor. Not only is con- 
sumption the one interest we all have in common, but 
it is also the most vital interest of each of us. It is 
essentially a personal, a human, interest distinct from 
a business or a trade interest. In fact, it is the only 
legitimate economic interest that any human being may 
have. The moment a man wants to possess more than 
he can consume, or use, his interests are opposed to 
the common good. There is nothing anti-social in 
desiring to possess an automobile that you can use. 
But the moment you want to possess more loaves of 
bread than you or your family can consume, your fel- 
lows should keep a watchful eye on you. No sane man 
would care to possess more than is useful to him, in 
a personal sense, unless he wished to gain economic 
control over his fellows. 

Consumers' Cooperation wants to establish an in- 
dustrial democracy, as universal as possible, in which 
all shall rule the social industries on an equal basis, 
as consumers. As consumers we shall control. As 
workers we shall serve, each according to his abilities, 
to be rewarded, not on an equal basis, nor according 
to the time he works, but, as near as human justice can 
fix it, according to the value his labor has to his fellows. 
And who but my fellows shall determine the value of 



2i6 consumers' cooperation 

my labor? Who but those who eat them can decide 
whether the loaves of bread I bake are eatable? Who 
but my readers shall decide whether the novel I write 
is amusing or instructive ? And who but the consumer 
shall, therefore, determine the prices? 

Private profit having been abolished, it follows 
logically that I shall receive the full product of my 
labor. Collective capital having displaced private 
capital in the public industries, there will be no inter- 
est or dividends to be sweated from Labor, and all who 
would consume must labor. Under cooperation 
human society will be like one person, laboring to sup- 
ply its own needs, whether those needs be purely ma- 
terial, like bread and meat, or of a spiritual nature, 
like art or music. 



THE END 



INDEX 



Aberdeen Cooperative Society, 
during war, 123 

Agricultural cooperation in 
America, 175 
defined, 176 
in Switzerland, 180 
cooperative societies in Rus- 
sia reactionary, 181 

American Federation of Labor 
indorses Cooperation, 166 

Ames, Ernest O. F., 151 

Anarchism and Cooperation, 
200-4 

Angst, E., on agricultural co- 
operation in Switzerland, 
180 

Anseele, Eduarde, founder of 
Belgian Cooperation, 108 

Australia, Cooperation in, 62 

Austria, Cooperation in, during 
war, 128, 135 
wholesale society founded in, 
62 



B 



Belgium, Cooperation in, dur- 
ing war, 127 
wholesale society founded in, 
62 

Bentleyville, Pa., cooperative 
store in, 158 

Bertrand, Louis, historian of 
Belgian Cooperation, 107 

Bohemia, Cooperation in, 106, 
128 

Bolsheviki and Cooperation, 60, 
140-1 

Boston, Mass., 167 

Brazilian coffee growers, 178 

Brighton Cooperator, The, Dr. 
King's organ, 15 

Brooklyn, N. Y., 162 

Brownsville, N. Y., cooperative 
bakery in, 163 

Buchez, Philippe Benjamin Jo- 
seph, founder of self-gov- 
erning workshops, 43 

Budapest, Sixth International 
Cooperative Congress held 
in, 79 

Bugle Horn Colliery, 52 



Bakeries, Cooperative, 102, 162 

Bakunin, Michael, 200 

Bank, English Cooperative 

Wholesale Society's, 35 
Moscow Narodni, 140 
Banking, Cooperative, 161, 183 
Basel, Switzerland, cooperative 

society founded in, 57 
Batley woolen mills, 91 



217 



Cahan, Abraham, editor of 

New York Vorwdrts, 139 
California, Cooperation in, 158 
Canada, wheat growers of, 179 
Capitalism, development of, 6 
Catholic Church and Belgian 

Cooperation, iii 
Central States Cooperative So- 
ciety, 158 



2l8 



INDEX 



Chauncelot flour mill, Scotland, 

93 

Chartism, 23 

Chateau-Thierry, cooperative 
society in, spared by Ger- 
mans, 125 

Chavez, Gregorio, pioneer of 
Cooperation in Tampa, 
Fla., 164 

Chicago, 111., headquarters of 
National Cooperative As- 
sociation, 167 

Child Labor, 5 

Christian Socialists, 42, 67-8 
opposed to Socialism, 66 
as early exponents of Syn- 
dicalism, 206 

Clarke, Dalton T., 158, 167 

Class Struggle, Cooperation 
and the, 187 

Cobden, Richard, assists co- 
operators, 31 

Cohn, Hyman, Cooperative 
pioneer in New York, 152 

Congress, Second International 
Cooperative, in Paris, 74 
Third International Coopera- 
tive, in Delft, 75 
Fourth International Co- 
operative, in Paris, 'j^ 
Fifth International Coopera- 
tive, in Manchester, 78 
Sixth International Coopera- 
tive, in Budapest, 79 
Seventh International Co- 
operative, in Cremona, 83 

Consumers' Cooperation, defi- 
nition of, 3, 172, 176 

Consumers* Cooperative pro- 
duction initiated, loi 
theory of, 54 

Consumers' Cooperative Union 
of New Jersey, 155 

Convention, First National Co- 
operative, in America. 
167 

Cooperative Consumer, The, 

155 



Cooperative League of Amer- 
ica, The, 155-6, 166 
of New York, The, 152 

Cooperative Nevus, The, organ 
of British Cooperation, 197 

Cooperative Production, Chris- 
tian Socialist theory of, 43 

Cooperative source of supply, 
..42 

Cooperative Wholesale Society 
of America, St. Paul, 
Minn., 159 

Cooperative World, The, pub- 
lication in Tampa, Fla., 166 

Co-partnership and Syndical- 
ism, 43 

Co-partnership workshops, fail- 
ure of, 52 
in United States, 54 
founded in France, 58 

Co-partnership in Belgium, 119 

Corn laws, 22 

Credit unions, 183 

Cremona, Seventh Interna- 
tional Cooperative Con- 
gress in, 83 

Cruger, Dr. H., 81 

Crumpsall, first cooperative 
factory at, 48 



Dairymen's League of New 
York, 175, 178 

Danville, 111., cooperative so- 
ciety in, 157 

De Boyve, E., founder of In- 
ternational Cooperative Al- 
liance, 64 

Delft, Holland, Third Interna- 
tional Cooperative Con- 
gress in, 75 

Denmark, Cooperative develop- 
ment in, 106 
first cooperative societies in, 

62 
wholesale society founded in, 
62 



INDEX 



219 



wholesale society fights ce- 
ment trust, 100 
Dublin harbor strike, 208 



East St. Louis, Cooperation in, 
158 



Farming, Consumers' Coopera- 
tive, loi, 104 

Federation, First attempts at, 
in England, 30 

Fenwick, Scotland, first co- 
operative society founded 
in, 13 

Finland, Cooperation in, 61 
wholesale society founded in, 
62 

Fitchburg, Mass., cooperative 
society in, 162 

Florida, Cooperation in, 164 

Flour milling. Cooperative, 92 

France, Cooperation in, 57, 64, 
125, 137 

Franco-Beige Cooperative Soci- 
ety in Lawrence, Mass., 
117 

Free Trade and Cooperation, 
195 

Fruit growers of California, 
177 



Gardening, Cooperative mar- 
ket, 104 

German Cooperators visit Eng- 
lish Cooperative Whole- 
sale Society in Manchester, 
76 

Germany, Cooperative move- 
ment in, 58-9, 62, 106, 134 

Goldman, Emma, her definition 
of Labor, 209 



Grangers and Cooperation, 147 

Gray, J. C, Secretary of British 
Cooperative Union, 78, 82 

Greening, E. O., 49 

Grey, Earl, speech at Ninth 
International Cooperative 
Congress at Glasgow, 84 



H 



Hernandez, A. R., 165 

High Cost of Living, cause of, 

41 
Hillquit, Morris, 186 
Holland, Cooperation in, dur- 
ing war, 138 
wholesale society founded in, 

62 
Holyoake, John Jacob, 16, 24, 

42, 69, 71-2, 78 
Housing, Cooperative, 104 
Hughes, Thomas, 42 
Hull, England, first cooperative 

corn mill founded in, 14 
Hungary, Cooperation in, 128, 

136 
wholesale society founded in, 

62 

I 

Illinois, Cooperation in, 156 
Governor of, supports co- 
operation, 158 
State Federation of Labor 
of, 156 

Industrial and Agricultural 
Cooperative Association of 
New York, 154 

International Cooperative Alli- 
ance, 70, 80, 83 

Into Cooperative Society, in 
Fitchburg, Mass., 162 

Italy, Cooperation in, 60 



J 



Japan, Cooperation in, 62 
Jewish Cooperators, 162 



!20 



INDEX 



Kauffman, Heinrich, director 
of German wholesale soci- 
ety, 79 

Kaulback, John G., founder of 
American Codperation, 56, 

145 

Kerensky, Russian Premier, 
supports Cooperation, 139 

King, Dr. William, first ex- 
ponent of Consumers' Co- 
operation, 14-16 

Kingsley, Charles, Christian 
Socialist, 42 

Knights of Labor, 149 

Koltchak Government, recog- 
nized by agricultural co- 
operative societies in Si- 
beria, 181 



Labor, definition of, 208 

under Cooperation, 206, 214 
Larkin, James, 206 
Lasalle, Ferdinand, 40, 'j^ 
Lawrence strike, 41, 117 
Legislation and Cooperation, 

193 

Legislation against Coopera- 
tion in Germany, 98 

Lenin, Russian Premier, 141 

London, Meyer, 186 

Ludlow, John, 42 

Lunn, Carl, 160 

Luzzatti, Luigi, Italian states- 
man and Cooperator, 60, 
71,83 

M 

Machinery, Invention of, 5 
mobs destroy, 7 

" Maisons du peuple " of Bel- 
gium, 112 

Malthus, Robert Thomas, econ- 
omist, 6 



Manchester, Fifth Interna- 
tional Cooperative Con- 
gress in, 78 

Mann, Thomas, 69 

Marx, Karl, 200 

Massachusetts, Cooperation in, 
162 

Maurice, Frederick, Christian 
Socialist, 42 

IMaxwell, William, 13, 86-7 

McDonald, Duncan, 156 

Meat combine fights Scottish 
Wholesale Society, 97 

Membership of national coop- 
erative movements, 106, 
133 

Membership, in Great Britain, 
increase during war, 132 

Minneapolis, Minn., Coopera- 
tion in, 151 

Mitchell, J. J. W., Chairman of 
English Wholesale Society, 

Monessen, Pa., Cooperation in, 

158 
Miiller, Dr. Hans, 16, 64, 69, 

72, 76, 80, 84, 173 



N 



National Cooperative Associa- 
tion, of America, 167 

Neale, Vansittart, Christian 
Socialist, 42 

Nelson, N. O., American Coop- 
erator, 75 

Newark, N, J.. Cooperative 
bakery in, 163 

New England, Cooperation in, 

145 

New England Protective 
Union, 146 

New Jersey, Cooperation in, 
155, 162 

New York, Cooperation in, 152 

Nimes, French cooperative so- 
cieties founded in, 64 



INDEX 



221 



Nonpartisan League's stores, 
i6o 

Northwestern Cooperative As- 
sociation, i6i 
Norway, Cooperation in, io6 

wholesale society founded in, 
• 62 



Profiteering, Cooperation 

curbs, 122 
Prohibition and Cooperation, 

in United States, 146 
in Belgium, 113 
Purity Bakery, in Paterson, 

N. J., 162 



Ouseburn Company, co-part- 
nership enterprise, 51 
Owen, Robert, 4, 7, 9, 10, 12, 20 



Pacific Cooperative League, 151 
Paris, Second International 
Cooperative Congress held 
in, 74 
Fourth International Coop- 
erative Congress held in, 

76 . 

cooperative societies founded 
in, 58 

Paterson, N. J., Cooperation in, 
162 

Patrons of Husbandry and Co- 
operation, 147 

Pennsylvania, Cooperation in, 
158 

Pittsburgh, Pa., Cooperation 
in, 158-9 

Plunkett, Sir Horace, 71-75 

Politics and Cooperation, 118, 
194 

Potter, Beatrice, see Webb, 
Mrs. Sidney 

Prices, high, cause of, 41 

Production, Consumers' Coop- 
erative, slow progress of. 

Production, cooperative society 
in Hamburg, Germany, 124 

Profit, abolished by Coopera- 
tion, 26 

Profit sharing, 53, 70, 72 

Profiteer, origin of word, 132 



Recreation, Cooperative, in 

Belgium, 112 
Redfern, Percy, quoted on his- 
tory of English Wholesale 
Society, 52 
Reiffeisen credit unions with- 
draw from International 
Cooperative Alliance, 81 
described, 183 
Right-Relationship League, 151 
Rochdale plan described, 25 
Rochdale store, growth of, 29 
Rochdale store organized, 23 
Russia, agricultural cooperative 
societies in, 181 
Cooperation in, during war, 

128, 138, 142 
first cooperative societies in, 

60 
wholesale society founded in, 
62 
Russian Cooperative Purchas- 
ing Agency in New York, 

143 
Russian Cooperators purchase 
United States army sup- 
plies, 143 



Sage Foundation promotes 
credit unions, 184 

St. Paul, Minn., Cooperation 
in, 159 

San Francisco, Cal., Coopera- 
tion in, 150 

Schulze-Delitzsch, 58 



222 



INDEX 



Schulze-Delitzsch societies in 
Germany, 58-9, 66, 183 
withdraw from International 
Cooperative Alliance, 80 

Scotland, Cooperation in, dur- 
ing war, 131 

Seattle, Washington, Coopera- 
tion in, 160 

Self-governing workshops, 43, 
52, 54,. 58, 119 

Serwy, Victor, Swiss Cooper- 
ator, 78 

Shieldhall, Scottish Wholesale 
Society's productive works 
at, 89 

Shillito, John, chairman of 
English Wholesale Society, 

87 
Ships owned by English 

Wholesale Society, 90, 92 
Single Tax and Cooperation, 

196 
Soap works established by 

English Wholesale Society, 

93 

Socialism and Cooperation, 

Socialism, Christian Socialists 

opposed to, 65-6 
Socialists turn to Cooperation, 

Socialist Convention, National, 
in Indianapolis, indorses 
Cooperation, 154 

Socialists at Seventh Interna- 
tional Cooperative Con- 
gress, 83 

South Africa, Cooperation in, 
62 

Sovereigns of Industry, 147 

Speculators, Cooperation curbs, 
122 

Springfield, 111., Cooperation in, 
158 

Springfield, Mass., Cooperation 
in, 149 

Statistics, general Cooperative, 
105 



Staunton, 111., Cooperation in, 

157 
Sweden, Cooperation in, 62, 138 
wholesale society founded in, 

62 
wholesale society in, fights 
trusts, 98-9 
Switzerland, agricultural coop- 
erative societies in, 180 
Cooperation in, 57, 106, 137 
wholesale founded in, 62 
wholesale society in, crushes 
meat trust, 100 
Syndicalism and Cooperation, 

205, 212 
Syndicalism and Co-partner- 
ship, 43 



Tampa, Fla., Cooperation in, 
164 

Tea, production. Cooperative, 
in Ceylon, loi 

Thisted, Denmark, first cooper- 
ative society in, 58 

Trade, Cooperative, Growth of, 

^°5 . . 
Trade Unionism, origin of, 7 
Transportation, Cooperative, 90 
Tri-State Cooperative Society, 

158-9 
Trust, Cement, crushed by 

Danish Wholesale Society, 

100 
English Soap, English 

Wholesale Society crushes, 

94 
Scottish soap, fights Scottish 

Wholesale Society, 93 
Meat, crushed by Swiss 

Wholesale Society, 100 
Sugar, crushed by Swedish 

Wholesale Society, 98 

U 

Union, British Cooperative, 36, 
38, 66, 70 



INDEX 



223 



Vooruit Cooperative Bakery, 

founded in Ghent, Belgium, 

109 
Vooruit, growth during war, 

127 
Vorwdrts, Jewish, in New 

York, 154-5 



W 

Walker, John H, 156 

War, effect of, on cooperation, 
129 
German Cooperators de- 
nounce, 134 

Warbasse, Dr. James P., 155 

Washington, State of, Cooper- 
ation in, 160 

Webb, Mrs. Sidney, 44, 45, yy, 
175, 186 



Wholesale Society, Austrian, 
during war, 128 
Belgian, 120 
English, 31-35, 47, 76, 90, 95, 

loi, 123, 131 
French, 125, 127 
German, 124 
International, 138 
Russian, 128, 139 
Scottish, 88, 97, 131 
Wholesale societies, when 

founded on continent, 62 
Wolff, Henry, 69, 75 
AVorkingmen's Protective Un- 
ion of New England, 146 



Ybor City, Tampa, Fla., Coop- 
eration in, 164 



Zurich, first Swiss cooperative 
society in, 57 



PEINTED IN THE UNITED STATES OF AMERICA 



78 



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